Acta Univ. Agric. Silvic. Mendelianae Brun. 2016, 64, 275-281
Published online 2016-02-29

Disclosure of Subsidiaries with Non-controlling Interest in Accordance with IFRS 12: Case of Materiality

Tereza Gluzová

Department of Financial Accounting and Auditing, Faculty of Finance and Accounting, University of Economics in Prague, nám. W. Churchilla 4, 130 67 Praha 3, Czech Republic

Consolidated financial statements present aggregated information for parent company and its subsidiaries. For non-wholly owned subsidiaries, International Financial Reporting Standards require non-controlling interest to be presented within consolidated equity to distinguish it from the amount of equity attributable to the shareholders of the parent. Since 2014, new standards on consolidation introduced broadened disclosure requirements for subsidiaries with material non-controlling interest. Definition of material non-controlling interest however is not included in the standards. The article provides the analysis of the financial statements published by companies listed on Prague Stock Exchange. Main focus is given to assessment criteria applied to identify material non-controlling interest. Consequently, study of compliance with the disclosure requirements for selected companies has been undertaken. The results of the analysis indicate whether value relevance of financial statements has been improved as a result of the new disclosures.


The article is processed as an output of a research project Relevance of Accounting Information on Consolidated Basis in Business and Public Sector [in Czech: Relevance účetních informací na konsolidovaném základu v podnikatelském i veřejném sektoru] registered by the Internal Grant Agency of University of Economics under the registration number F1/47/2015.


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