SW1 Flashcards
Merkmale:
Financial statement of an economic entity
- Basis for share price valuation
- No taxation based on consolidated net profit (in Switzerland)
- Presentation of the operating activities of the group
- True and Fair view (according to Swiss GAAP FER)
- Credit Rating (Banking)
Merkmale:
Financial statement of a legal entity
- Based on Swiss Law (Obligationenrecht [OR])
- Relevant for assessment of taxes
- Presentation of the activities of solely one company
- Hidden reserves/secret reserves
Purpose of consolidation?
- Look at the group as a whole to assess the true financial situation
- Separate financial statements lose all significance
- Intercompany relations must be eliminated
- Only the relations to third parties are relevant
Wann gehört eine Tochtergesellschaft zum Konsolidierungskreis?
- when > 50% voting rights or
- contractual agreements allow control
- or by having otherwise the power to govern the operating and financial policies
Ein assoziertes U. gehört zum Konsolidierungskreis.
Associate erklären
- Parent takes a significant stake in another entity
- Typically includes a voting share of at least 20% but less than 50%
- Significant influence on the business is probable
Swiss GAAP FER
overview
• Recommendation for accounting standards in Switzerland
• Revised accounting standard came into effect on Jan. 1, 2007
• True and fair view with focus on all users (including investors)
• Goal to increase the comparability of financial statements and reach equality with
international accounting standards
• Basic level for listing at SWX Swiss Exchange Local-Caps sector
• Core FER (for small companies), further recommendations and Swiss GAAP FER
30 (Consolidated Financial Statements).
IAS/IFRS
overview
• Fair Presentation
• International Accounting Standards Board
• International organisation (situated in London) with 14 Board members
• Goal: transparency, comparability, international harmonization, geared towards capital
markets
• “True and fair view”
• Began in 1973, now used in 100 countries
• Since 2005: Entities listed on the main segment of the SWX Swiss Exchange have to
follow IFRS or US GAAP
US GAAP
overview
• Generally accepted accounting principles (US GAAP)
• Power to establish US GAAP rests with the Securities and Exchange Commission
(SEC)
• Duty of the SEC is to protect the individual investor
• The SEC has mainly delegated establishing GAAP rules to the accounting profession
• Since 1973, a full-time private institution, the Financial Accounting Standards Board
has determined US GAAP
• Case law system in the USA means that there are many detailed rules (case based)
• Convergence project with the IFRS since 2002
Summary
Accounting rules
Principles of Uniformity (3)
Uniform Account Allocation and Structuring
•
Uniform Measurement
•
Uniform Balance Sheet Closing Date
What is the appropriate consolidation method?
Dabei werden „ Assoziierten Unternehmen“ nach der Equity-Methode bewertet, während Beteiligungen unter 20 Prozent zu den Anschaffungs- oder ihren aktuellen Werten bilanziert werden (Swiss GAAP FER 30 Ziff. 5). Beteiligungen an Gemeinschaftsunternehmen (sog. „Joint Ventures“) können, obwohl sie nicht unter der Kontrolle der Muttergesellschaft stehen, wahlweise quotenkonsolidiert oder „normal“ als Aktiven bilanziert werden.
Acquisition costs consist of? (3)
- shares issued
- assets transferred
- liabilities assumed
How is positve goodwill capitalized?
goodwill / revaluation reserve
How is negative goodwill capitalized?
revaluation reserve / profit
Steps of the consolidation 100%
retained Earnings / Capital Reserves
- PPE / revaluation Reserves*
- current-Liabilites / revalation Reserves*
Capital Reserves / Equity per Acquisition
Share Capital / Equity per Acquisition
revaluation Reserves / Equity per Acquisition
