Advanced Consolidation

I. Consolidation of financial statements: general framework

Question 1

Haulotte Group, a more than centenary French company specialized in lifting equipment, is using consolidation financial statements since they went on the French Stock Exchange (Euronext Paris) in December, 3rd 1998. Haulotte is very active on the international market as they are represented through subsidiaries and offices in more than 100 countries, even if most of their revenues come from Europe (205604€ over 306922€ in thousands of euros). All subsidiaries that are directly or indirectly under Haulotte's control are fully consolidated (UK, China, Argentina, Romania, Australia, USA, Mexico...). This company focuses on three businesses activities:

* The manufacture and sale of lifting equipment

* The rental of lifting equipment

* Services (spare parts, repairs and financing)

BCF Ferries is a major transportation Canadian company specialized in the ferry market which provides vehicle and passengers services using 35 vessels. The company uses consolidated financial statements (consolidated balance sheet; consolidated statements of earnings, comprehensive income and retained earnings; and consolidated statements of cash flows, and notes). BCF Ferries was originally supposed to convert into IFRS in 1, April 2011 but the change has been deferred by one year by the company's top management. The Annual Report of 2011 then is still computed under the Canadian GAAP standards although transition to IFRS will require the restatement of the Annual Report of 2011 for comparative purposes. BCF Ferries is implemented in British Columbia. The company operates only on the coastal ferry transportation activity even if it is segmented in two parts: the vehicle transportation and the passenger transportation.

Vodacom is used to prepare consolidated financial statement since it was introduced in stock exchange market. The ending year for this company is the 31th of March each year. Vodacom is an African mobile telecommunications company, and was the number-one cellular network in South Africa. It provides GSM service to more than 35 million customers in South Africa, Tanzania, Lesotho, Mozambique, and the Democratic Republic of the Congo.

Question 2

The official annual report for Haulotte gives a summary of key figures and activities of the company. It's written in 27 pages which mean that we did not find a lot of details about financial information.

However we noticed that the financial data were not enough so we kept on looking on the website and we found a specific report for consolidated financial statement of 57 pages where the all the accounting and financial information are detailed.

Using this report we can identify the different accounting policies: the Group's consolidated financial statements for fiscal Year ended 31 December 2011 have been prepared according to IFRS (International Financial Reporting Standards). The consolidated financial statements have been prepared according to the historical cost convention, with the exception of certain items, notably assets and liabilities measured at fair value. The financial statement (balance sheet, income statement and cash flows) are clearly giving in the beginning of the report with details and explained.

BCF Ferries Annual Report's is introduced with the Letter of Chairman and then the letter of the CEO. The company's management seems to be optimistic as they highlight afterwards the key accomplishments they managed to reach in 2011. Their consolidated financial statements are reported under Canadian GAAP system in 2011, meanwhile the company is working on the transition to the IFRS system for the Annual Report of 2012. This transition project consists of three phrases as mentioned in their 2011 Annual Report:

* Scoping and diagnostic phase

 High level impact assessment of differences between current Canadian GAAP and IFRS...

* Analysis and development phase

 Detailed analysis and evaluation of options and alternative methodologies available under IFRS and the financial impacts of these options

* Implementation and review phase

 Implementing and approving changes to accounting policies, information system, business processes and training

The official annual report for Vodacom is divided in two parts or what they called "books". First book gives an idea about the integrated view of business activities of Vodacom, their strategy and prospects. Second book fulfills financial reporting requirements and give the consolidated financial statement with comments. The first book is detailed in 98 pages however the second about consolidated financial statement is in 122 pages.

Using this report we can identify the different accounting policies: the Group's consolidated financial statements for fiscal Year ended 31 December 2011 have been prepared according to IFRS (International Financial Reporting Standards). The consolidated annual financial statements are prepared on a historical cost basis, except for certain financial instruments which are measured at fair value or at amortized cost. The financial statement (balance sheet, income statement and cash