Porsche 2009 Annual Report Download - page 144

144 Financials
When deconsolidating the previous subsidiary, the difference between the consideration re-
ceived (upon disposal) or the fair value of the investment retained (upon partial sales or loss of
control for other reasons) and the net assets disposed of at the date when control is lost (including
any goodwill from acquisition accounting) is recognized in profit or loss. Income and expenses
recognized directly in the previous subsidiary’s equity for foreign currency effects, securities
marked to market, cash flow hedges and investments accounted for at equity are derecognized
through profit or loss at the date of loss of control. Any revaluation reserve recognized in accor-
dance with IFRS 3 (rev. 2004) is not derecognized through profit or loss at the date of deconsolida-
tion but reclassified to accumulated profits within equity.
Business combinations and deconsolidations before 1 August 2009
Compared to the above accounting policies, the previous accounting in accordance with
IFRS 3 (rev. 2004) and IAS 27 (rev. 2004) diverged in the following respects:
Acquisition-related costs are a component of cost of the business combination. Non-
controlling interests were included at their proportionate share in the identified net assets. In a
business combination achieved in stages, each exchange transaction is accounted for separately,
i.e. for each transaction, the acquisition cost of the share purchase is compared with the relevant
share in the identifiable net assets determined at the acquisition date.
Any remaining positive difference from offsetting the acquisition cost against the identified
assets and liabilities at the date of acquisition measured at fair value is recognized as goodwill
within intangible assets. If, in a business combination achieved in stages, shares of the acquired
subsidiary were held before initial consolidation, the changes in hidden reserves and hidden liabili-
ties attributable to these shares for the period between share purchase and initial consolidation are
recorded in a separate reserve within retained earnings in accordance with IFRS 3 (rev. 2004).
When subsidiaries are deconsolidated, any shares retained by the group are recognized at
the proportionate equity attributable to them at the date of deconsolidation.
Equity accounting
When investments accounted for at equity are acquired, they are recognized at cost as of
the date of initial recognition at equity. In the event of partial sale or loss of control of previously
fully consolidated subsidiaries for other reasons, they are recognized at fair value as of the date
when control is lost. The consolidation procedures generally apply by analogy to investments ac-
counted for at equity. Any goodwill that arises as part of the investment carrying amount is not
amortized or tested for impairment separately. Any negative goodwill is reassessed and recognized
through profit or loss at the date when the investment is initially accounted for at equity.