pooling of interests method restatement of financial information for periods prior t 611769

Pooling of interests method restatement of financial information for periods prior to the date of the combination (1)

Assume the same facts as in above.

In preparing its consolidated financial statements for the year ended 31 December 2013, should Entity B include financial information for Entity C for the period prior to the date of obtaining control on 1 October 2013 (thereby restating the 2012 comparatives) in its consolidated financial statements as if the business combination (and the investment in Entity C) took place as from 1 January 2012?

Entity B has a choice of two approaches for its accounting policy, which must be applied consistently:

Approach 1 Restatement

Since Entity C has been part of the Entity A group for a number of years, then Entity B includes financial information for Entity C as from 1 January 2012, restating the 2012 comparatives in its consolidated financial statements for 2013.

Approach 2 No restatement

Entity B does not restate the financial information in its consolidated financial statements for 2013 (including the 2012 comparatives) for any financial information for Entity C prior to 1 October 2013 (the date of the combination).