Consolidating all of

Posted by / 11-Apr-2020 01:22

Consolidating all of

This site uses cookies to provide you with a more responsive and personalised service.By using this site you agree to our use of cookies.An investor controls an investee when it is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee. An investor must be exposed, or have rights, to variable returns from its involvement with an investee to control the investee.[IFRS 10:5-6; IFRS 10:8] An investor controls an investee if and only if the investor has all of the following elements: [IFRS 10:7] Power arises from rights. Such returns must have the potential to vary as a result of the investee's performance and can be positive, negative, or both.Control requires exposure or rights to variable returns and the ability to affect those returns through power over an investee.

Furthermore, post-employment benefit plans or other long-term employee benefit plans to which IAS 19 Employee Benefits applies are not required to apply the requirements of IFRS 10.

The objective of IFRS 10 is to establish principles for the presentation and preparation of consolidated financial statements when an entity controls one or more other entities.

[IFRS 10:1] The Standard: [IFRS 10:1] An investor controls an investee when the investor is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee * Added by Investment Entities amendments, effective 1 January 2014.

[IFRS ] A parent must not only have power over an investee and exposure or rights to variable returns from its involvement with the investee, a parent must also have the ability to use its power over the investee to affect its returns from its involvement with the investee. When assessing whether an investor controls an investee an investor with decision-making rights determines whether it acts as principal or as an agent of other parties.

A number of factors are considered in making this assessment.

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[Note: The investment entity consolidation exemption was introduced by Investment Entities, issued on 31 October 2012 and effective for annual periods beginning on or after 1 January 2014.] IFRS 10 contains special accounting requirements for investment entities.

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