Revision question on IFRS 10 (NBAA C1 NOV 2018)



Utata is a private mutual fund registered under the laws of Tanzania for over 20 years. Utata obtains funds from a large group of investors and provides those investors with returns and investment management services. Utata’s main business line has been to acquire portfolios of undervalued investments from diverse range of entities and later resell the investment at lucrative prices. Utata currently report all its investments on a ‘fair value through profit or loss’ basis. Early January 2017, Utata purchased 71% of the equity shares of Tanzania Juice Company (TJC). Following this acquisition some directors have feelings that the investment in TJC constitutes Utata’s controlling power, to direct relevant activities of TJC, and consequently the latter has to be consolidated in accordance with International Financial Reporting Standards (IFRSs). Others have retained the long standing policy of Utata that, TJC will be treated like any other investments. Utata asserts to comply with IFRSs. Utata’s board of directors have approached you to present to them guidance on the divergent views of the directors.



REQUIRED:

Prepare briefing notes to assist you in your presentation on how to deal with the matter in accordance with IFRSs.

1 thought on “Revision question on IFRS 10 (NBAA C1 NOV 2018)”

  1. Pingback: Conditions Set By IFRS 10 To Determine Entities Required To Prepare Consolidated Financial Statements - ACCA ONLINE ACCOUNTING TEACHER

Leave a Comment

Your email address will not be published. Required fields are marked *

%d bloggers like this: