Application of IFRS 10 in Argentina

Application of IFRS 10 in Argentina

Comparte esta noticia

Share on linkedin
Share on facebook
Share on whatsapp
Share on twitter
Share on email

In Argentina, the accounting framework contemplates different regulatory possibilities when valuing and exposing the different items in the financial statements. The standards that can be applied are:

  1. International Financial Reporting Standards (IFRS).
  2. International Financial Reporting Standards for SMEs (IFRS for SMEs).
  3. Professional Accounting Standards issued by the Argentine Federation of Professional Councils in Economic Sciences (FACPCE) (Technical Resolutions – RT -).

Given the mandatory nature of IFRS for some taxpayers and the freedom of choice for others, there will be economic activities in which certain taxpayers apply IFRS and others do not. Likewise, there will be taxpayers with the same economic financial situation that will present financial statements with different assets and results, depending on the application or not of these IFRS.

Consolidated Accounting Statements

RT 26 of the FACPCE, indicates that for entities that present consolidated financial statements, together with their individual financial statements, and for those that only present their individual financial statements, because they do not exercise control or joint control over other entities, the application of IFRSs (by obligation or by option) must be comprehensive and without modification with only one exception: in the individual financial statements, investments in subsidiaries (controlled entities), jointly controlled entities or associates in which significant influence is held, must be accounted for by the equity method according to IAS 28 and with the same adjustments as in the consolidated financial statements. This criterion differs from that established by IAS 27 for the aforementioned case, since it provides for them to be measured: at cost, or at fair value, if it can be measured reliably. The purpose of this exception is to ensure that the equity and results (and eventually other comprehensive income), which are attributed to the shareholders of the controlling entity and arise from the consolidated financial statements, coincide with those reported in the individual financial statements, being consistent with the legal regulations in force in Argentina; according to which corporate decisions are based on the individual statements and not on the consolidated ones.

In this regard, Argentina applies in full and without modification the provisions of IFRS 10.

Application of IFRS 10

The objective of International Financial Reporting Standard No. 10 (IFRS 10) Consolidated Financial Statements, is to establish the principles for the presentation and preparation of consolidated financial statements when an entity controls one or more distinct entities.

To meet this objective:

  1. An entity that controls one or more distinct entities (subsidiaries) is required to present consolidated financial statements.
  2. It defines the principle of control, and establishes control as the basis for consolidation.
  3. It establishes how the control principle is applied to identify whether an investor controls an investee and therefore must consolidate that entity.
  4. It establishes the accounting requirements for the preparation of consolidated financial statements.
  5. Defines an investment entity and establishes an exception to consolidate certain subsidiaries of an investment entity.

The principle of consolidation is the control of an investee, for which reason we mention the definition established by this same Standard:

Control of an investee

An investor controls an investee when he is exposed to, or is entitled to, variable returns from his involvement in the investee, and has the ability to influence those returns through his power over the investee.

If an entity owns a significant percentage of the shares of a subsidiary, it is presumed that it controls and maintains the power to influence decision-making on its operating and financial activities, and therefore it is responsible for consolidating it in accordance with IFRS 10.

Noticias Relacionadas

Consolidated Financial Statements
Niif English

Consolidated Financial Statements

Definition Consolidated financial statements is the grouping of the financial statements of the controlling entity (parent) with the separate financial statements of the subsidiaries, in

LEER NOTICIA »

How can we help you?

    To communicate with us you need to fill out the following form

    I have read and agree the privacy policy