Ifrs10 SN
Ifrs10 SN
Ifrs10 SN
INTRODUCTION
DEFINED TERMS
Consolidated The financial statements of a group in which the assets, liabilities, equity, income,
financial expenses and cash flows of the parent and its subsidiaries are presented as those
statements of a single economic entity.
An investor controls an investee when the investor is exposed, or has rights, to
Control of an
variable returns from its involvement with the investee and has the ability to affect
investee
those returns through its power over the investee.
An entity that:
(a) obtains funds from one or more investors for the purpose of providing those
investor(s) with investment management services
Investment
(b) commits to its investor(s) that its business purpose is to invest funds solely
entity
for returns from capital appreciation, investment income, or both, and
(c) measures and evaluates the performance of substantially all of its
investments on a fair value basis.
Parent An entity that controls one or more entities.
Power Existing rights that give the current ability to direct the relevant activities.
Protective Rights designed to protect the interest of the party holding those rights without
rights giving that party power over the entity to which those rights relate.
Relevant Activities of the investee that significantly affect the investee's returns.
activities
CONTROL
An investor determines whether it is a parent by assessing whether it controls
one or more investees. An investor considers all relevant facts and
Determining circumstances when assessing whether it controls an investee. An investor
control 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 controls an investee if and only if the investor has all of the following
elements:
(a) power over the investee, i.e. the investor has existing rights that give it
the ability to direct the relevant activities (the activities that significantly
Elements of
affect the investee's returns);
Control
(b) exposure, or rights, to variable returns from its involvement with the
investee;
(c) the ability to use its power over the investee to affect the amount of the
investor's returns.
Such rights can be straightforward (e.g. through voting rights) or be complex
Power arises (e.g. embedded in contractual arrangements). An investor that holds only
from rights protective rights cannot have power over an investee and so cannot control an
investee.
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IFRS 10 Summary Notes
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IFRS 10 Summary Notes
CONSOLIDATION PROCEDURES
REPORTING DATES
The parent and subsidiaries are required to have the same reporting dates, or
Same dates consolidation based on additional financial information prepared by subsidiary,
unless impracticable.
Where impracticable, the most recent financial statements of the subsidiary are
If
used, adjusted for the effects of significant transactions or events between the
Impracticable
reporting dates of the subsidiary and consolidated financial statements.
Maximum The difference between the date of the subsidiary's financial statements and that
Difference of the consolidated financial statements shall be no more than three months.
NON-CONTROLLING INTERESTS
Statement of A parent presents non-controlling interests in its consolidated statement of
financial financial position within equity, separately from the equity of the owners of the
position parent.
A reporting entity attributes the profit or loss and each component of other
comprehensive income to the owners of the parent and to the non-controlling
interests. The proportion allocated to the parent and non-controlling interests
Statement of
are determined on the basis of present ownership interests.
comprehensive
income
The reporting entity also attributes total comprehensive income to the owners of
the parent and to the non-controlling interests even if this results in the non-
controlling interests having a deficit balance.
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IFRS 10 Summary Notes
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IFRS 10 Summary Notes
INVESTMENT ENTITY
ACCOUNTING REQUIREMENT
An investment entity is required to measure an investment in a subsidiary at fair
FVTPL value through profit or loss in accordance with IFRS 9 Financial
Instruments or IAS 39 Financial Instruments:
Consolidation However, an investment entity is still required to consolidate a subsidiary where
to related that subsidiary provides services that relate to the investment entity’s inve stment
business activities.
subsidiary
No Because an investment entity is not required to consolidate its subsidiaries,
elimination intragroup related party transactions and outstanding balances are not eliminated.
Special Special requirements apply where an entity becomes, or ceases to be, an
accounting investment entity.
The exemption from consolidation only applies to the investment entity itself.
Exemption Accordingly, a parent of an investment entity is required to consolidate all entities
Restriction that it controls, including those controlled through an investment entity subsidiary,
unless the parent itself is an investment entity.
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