Memory of Ifrs

MEMORANDUM

DATE 19TH 2013

FROM: Group 15

SUBJECT: How Herb Huskies Investors should account for their investment in NIU Holdings in the new consolidated financial statements.

TO: Ms. Smith

1. What accounting literature you applied and in what order you applied it if you are relying on multiple sources of guidance. Include the appropriate citations and list of references.

* IFRS 10 (control) will be applied. As both Herb Huskies and John Simon LLC invest in LLC 50%, that is to say, it regards as joint venture. The accounting treatment is equity method or proportional consolidated. Besides, the LLC and Tidrick own Holdings 20% and 80% respectively. It means that Holdings is a subsidiary of Tidrick.

2. What were the key facts that you focused on in your analysis.

* Herb’s investments responsibility in the new financial statements according to IFRS 10

* Whether the company Contracts compliance with IFRS standard, such as, agreement stipulates how the Members allocate profits and losses, distribute cash.

* Analysis of the Property management agreements contents based on IFRS information

* The benefits and disadvantage of new consolidated financial statements bring for the company, and how to manage and mitigate the defect

3. If you made assumptions that you viewed as key to your analysis, be sure to discuss those assumptions.

* According to the second key factors, assumpt that the company Contracts does not totally compliance with IFRS standard, there will be some problems in terms of transparency.

* For the last view, assumpt that some shortages will be appeared under the new IFRS, such as the expenses will be incrased.

4. Be sure to include in your analysis, each parties relationship with NIU Holdings

Reviewing the ownerships of NIU holdings, the control among parties is various. While Tidrick owns 80% ownership of NIU holdings, it played the main control of the NIU holdings. However, Herb has also the direct...