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Commentary on the Adjustments Required for Intercompany Transactions when Equity Accounting Under IAS 28

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  • Michael E. Bradbury

Abstract

The IASB has several projects on the equity method of accounting that involve the transfer of assets between an investor and its associate or joint venture. This paper provides a commentary on this issue by providing examples of alternative methods of adjusting for inter†company profits. The underlying concepts for alternative approaches are discussed. The conclusion outlines the steps the IASB needs to take to resolve this issue.

Suggested Citation

  • Michael E. Bradbury, 2018. "Commentary on the Adjustments Required for Intercompany Transactions when Equity Accounting Under IAS 28," Australian Accounting Review, CPA Australia, vol. 28(1), pages 140-147, March.
    • Handle: RePEc:bla:ausact:v:28:y:2018:i:1:p:140-147
    DOI: 10.1111/auar.12180
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    References listed on IDEAS

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    1. Stephen Haswell & Ian Langfield-Smith, 2008. "Fifty-Seven Serious Defects in ‘Australian’ IFRS," Australian Accounting Review, CPA Australia, vol. 18(1), pages 46-62, March.
    2. Smolinski, Ej, 1963. "The Adjunct Method In Consolidations," Journal of Accounting Research, Wiley Blackwell, vol. 1(2), pages 149-175.
    3. Christopher Nobes, 2002. "An Analysis of the International Development of the Equity Method," Abacus, Accounting Foundation, University of Sydney, vol. 38(1), pages 16-45, February.
    4. Ricchiute, David N., 1979. "Standard setting and the entity-proprietary debate," Accounting, Organizations and Society, Elsevier, vol. 4(1-2), pages 67-76, January.
    5. Malcolm C. Miller & Ken Leo, 1997. "The Downside of Harmonisation Haste: The Equity Accounting Experience," Australian Accounting Review, CPA Australia, vol. 7(14), pages 2-15, October.
    6. Moores, Ken & Steadman, G. T., 1986. "The comparative viewpoints of groups of accountants: More on the entity -- Proprietary debate," Accounting, Organizations and Society, Elsevier, vol. 11(1), pages 19-34, January.
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    Cited by:

    1. Michael E. Bradbury & Laura Mehnaz & Tom Scott, 2022. "The use and usefulness of equity accounting," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 62(S1), pages 1957-1981, April.
    2. Thomas Walter Kollruss, 2022. "Consolidated financial statements and global tax policy (OECD BEPS) insights from a multijurisdictional case study," SN Business & Economics, Springer, vol. 2(9), pages 1-17, September.
    3. Michael E. Bradbury, 2021. "Business Combinations under Common Control: Further Considerations," Australian Accounting Review, CPA Australia, vol. 31(4), pages 332-335, December.

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