Course detail

Consolidated Financial Statements

FP-FkuzKAcad. year: 2021/2022

The course is focused on the issue of producing the consolidated financial statements. Students will gain knowledge on consolidating a group of enterprises, methods of consolidation of financial statements and the skills necessary for the preparation of consolidated financial statements.

Language of instruction

Czech

Number of ECTS credits

5

Mode of study

Not applicable.

Guarantor

prof. Ing. Miloš Tumpach, Ph.D.

Department

Institute of Finances (ÚF)

Learning outcomes of the course unit

Students will gain knowledge on the groups of enterprises which are compiling the single sete consolidated financial statements, theoretical knowledge of the methods of consolidation and the basic practical skills needed for preparation of the consolidated financial statements.

Prerequisites

The following are the prerequisites for the Consolidation of the financial statements:
- knowledge and skills related to financial accounting
- ability to prepare the individual financial statements
- knowledge of the information value of each part of the individual financial statements.

Co-requisites

Not applicable.

Planned learning activities and teaching methods

Consultations are focused on the explanation of basic principles, methodology of the given discipline, problems and model solutions; they also contribute to achieve the practical command of the of the subject, presented in the form lectures or assigned for individual study.

Assesment methods and criteria linked to learning outcomes

In the combined form of study the students independently process practical tasks, focused on the use of individual methods of consolidation, calculation of the consolidated difference and exclusion of relationships between enterprises in the group. E-learning is used to assign tasks, monitor and assess them. The overall evaluation of fulfilled tasks is carried out in accordance with the ECTS scale.

The final marking consists from two parts: A (consolidation in accordance with the Czech legislation, the marking has a weight of 50 % of total points allocated for the final marking) and B (consolidation in accordance with the IFRS, the marking has a weight of 50 % of total points allocated for final marking). For passing the exam, a student has to achieve at least 50 % of the total points allocated for the total points for the part A and at least 50 % of the total points allocated for the part B. For the part B (consolidation in accordance with the IFRS), the evaluation consists from the marking of two pratical cases covering compilation of the consolidated financial statements (each one for up to 17.5 points, based on the accuracy of the solutions), test with 15 multichoice questions (each correct answer marked with 0.5 point) and 5 set of questions (for each set, based on the accuracy of the answer, up to 1.5 point).

Course curriculum

The course consists of the common part, part A and part B.
Common part: Economic rationale of the consolidation. Consolidation methods: full method, proportionate method. Equity method.

Part A: Consolidate financial statements (CFS) in accordance with the Czech legislation
Scope of the CFS, its content and the legal framework for consolidation in Czech Republic.
Consolidated group in accordance with the Czech accounting legislation. Deficit or surplus determined at the acquisition and their measurement as of the date of the acquisition. Impact of the deficit and surplus on profit or loss.
Impact of their application consolidation methods on the financial statements covering the first and the second year of consolidation.
Compilation of the CFS – presentation of used schedules and procedures.
Part B: Consolidated financial statements (CFS) in accordance with the IFRS
Obligatory preparation of the CFS in accordance with the IFRS and related exemptions.
Different levels of engagement of an investor; subsidiaries and affiliated companies. Concept of control and various ways of its form and acquisition. General requirements for application of the same accounting policies and accounting periods by members of an consolidate group.
Acquisition method: determination of the date of the acquisition of the control, revaluation of assets and liabilities to fair value. Different ways of recognition of assets and liabilities in individual and consolidated financial statements (e. g. contingent liabilities of subsidiaries for which the fair value could be determined, investment properties leased out to other member of the group, other intragroup transaction involving the sale and provision of services). Measurement of consideration provided by an acquirer. Measurement of non-controlling interest, determination of goodwill / gain from a bargain purchase.
Elimination of the impact of the intragroup transactions between parent company, subsidiaries and affiliated companies. Accounting for the post-acquisition retained earnings and non-controlling interests for acquisition realised after the beginning of an accounting period. Accounting for differences related to different classification, recognition or measurement of assets and/or liabilities in CFS and FS of member of a group, including the revaluation of assets and/or liabilities to fair value.
Accounting for impairment of goodwill in accordance with IAS 36
Impact of the loss of control in subsidiary on the consolidate and individual financial statements of a parent
Compilation of the CFS in accordance with the IFRS for the group consisting from the parent company, a subsidiary and an affiliate.

Work placements

Not applicable.

Aims

The course objective is to enable the students
- to understand the logic of processing accounting outputs of a group consisting of controlling company and controlled companies
- to understand the consolidated financial statements
- to know and be able to work with the methods of preparing consolidated financial statements

Specification of controlled education, way of implementation and compensation for absences

Attendance at seminars is monitored. Seminar exercises include preparing a consolidated balance sheet and a consolidated profit and loss account. The exercises submitted are graded on a scale of 0 to 20 points. To get the credit for the seminars a student has to receive at least 50 %, i.e. 10 points.

Recommended optional programme components

Not applicable.

Prerequisites and corequisites

Not applicable.

Basic literature

ČÚS pro podnikatele č.003 Odložená daň, č.011 Operace s podnikem, č.020 Konsolidace (CS)
FEDOROVÁ, A. Průvodce studiem předmětu konsolidace účetní závěrky. VUT v Brně, 2017. (CS)
Nařízení Komise (ES) č. 1126/2008 ze dne 3. listopadu 2008 , kterým se přijímají některé mezinárodní účetní standardy v souladu s nařízením Evropského parlamentu a Rady (ES) č. 1606/2002 Dostupné na: https://eur-lex.europa.eu/legal-content/CS/TXT/PDF/?uri=CELEX:02008R1126-20210101&from=EN (CS)
Vyhláška č.500/2002Sb., kterou se provádějí některá ustanovení zákona o účetnictví (CS)
Zákon č.593/1991Sb., o účetnictví (CS)
Zelenka V., Zelenková, M. (2018). Konsolidace účetních výkazů. Principy a praktické aplikace. Praha : Ekopress (CS)

Recommended reading

Clendon, T. (2013). A student´s guide to Group Accounts. Second Edition. Kaplan Publishing (EN)
JONÁŠ, R., LOJA, R. Konsolidovaná účetní závěrka podle českých předpisů v příkladech. Praha: VOX. 2016. ISBN 978-80-87480-52-6. (CS)
VAŠEK, L., HORNICKÁ, R. Konsolidace ekvivalence majetkových účastí podle IFRS. Praha: Wolters Kluwer, 2013. ISBN 978-80-7357-969-2. (CS)

Classification of course in study plans

  • Programme MGR-KS Master's

    branch MGR-UFRP-KS-D , 1 year of study, summer semester, compulsory

  • Programme MGR-UFRP-KS Master's 1 year of study, summer semester, compulsory

Type of course unit

 

Guided consultation in combined form of studies

16 hod., optionally

Teacher / Lecturer

doc. Ing. Jaroslava Rajchlová, Ph.D.

Syllabus

The course consists of the common part, part A and part B.
Common part: Economic rationale of the consolidation. Consolidation methods: full method, proportionate method. Equity method.

Part A: Consolidate financial statements (CFS) in accordance with the Czech legislation
Scope of the CFS, its content and the legal framework for consolidation in Czech Republic.
Consolidated group in accordance with the Czech accounting legislation. Deficit or surplus determined at the acquisition and their measurement as of the date of the acquisition. Impact of the deficit and surplus on profit or loss.
Impact of their application consolidation methods on the financial statements covering the first and the second year of consolidation.
Compilation of the CFS – presentation of used schedules and procedures.
Part B: Consolidated financial statements (CFS) in accordance with the IFRS
Obligatory preparation of the CFS in accordance with the IFRS and related exemptions.
Different levels of engagement of an investor; subsidiaries and affiliated companies. Concept of control and various ways of its form and acquisition. General requirements for application of the same accounting policies and accounting periods by members of an consolidate group.
Acquisition method: determination of the date of the acquisition of the control, revaluation of assets and liabilities to fair value. Different ways of recognition of assets and liabilities in individual and consolidated financial statements (e. g. contingent liabilities of subsidiaries for which the fair value could be determined, investment properties leased out to other member of the group, other intragroup transaction involving the sale and provision of services). Measurement of consideration provided by an acquirer. Measurement of non-controlling interest, determination of goodwill / gain from a bargain purchase.
Elimination of the impact of the intragroup transactions between parent company, subsidiaries and affiliated companies. Accounting for the post-acquisition retained earnings and non-controlling interests for acquisition realised after the beginning of an accounting period. Accounting for differences related to different classification, recognition or measurement of assets and/or liabilities in CFS and FS of member of a group, including the revaluation of assets and/or liabilities to fair value.
Accounting for impairment of goodwill in accordance with IAS 36
Impact of the loss of control in subsidiary on the consolidate and individual financial statements of a parent
Compilation of the CFS in accordance with the IFRS for the group consisting from the parent company, a subsidiary and an affiliate.