Objective
The objective of this IFRS is to establish principles for the presentation and preparation of consolidated financial statements when an entity controls one or more other entities.
Scope
An entity that is a parent shall present consolidated financial statements. This IFRS applies to all entities, except as follows:
a parent need not present consolidated financial statements if it meets all the following conditions:Β
- it is a wholly-owned subsidiary or is a partially-owned subsidiary of another entity and all its other owners, including those not otherwise entitled to vote, have been informed about, and do not object to, the parent not presenting consolidated financial statements;
- its debt or equity instruments are not traded in a public market (a domestic or foreign stock exchange or an over-the-counter market, including local and regional markets);
- it did not file, nor is it in the process of filing, its financial statements with a securities commission or other regulatory organisation for the purpose of issuing any class of instruments in a public market; and
- its ultimate or any intermediate parent produces financial statements that are available for public use and comply with IFRSs, in which subsidiaries are consolidated or are measured at fair value through profit or loss in accordance with this IFRS.
Defined terms
consolidated financial statements The financial statements of a group in which the assets, liabilities, equity, income, expenses and cash flows of the parent and its subsidiaries are presented as those of a single economic entity.
control of an investee 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.
decision maker An entity with decision-making rights that is either a principal or an agent for other parties.
group A parent and its subsidiaries
investment entity An entity that:
- obtains funds from one or more investors for the purpose of providing those investor(s) with investment management services;
- commits to its investor(s) that its business purpose is to invest funds solely for returns from capital appreciation, investment income, or both; and
- measures and evaluates the performance of substantially all of its investments on a fair value basis.
non-controlling interest Equity in a subsidiary not attributable, directly or indirectly, to a parent.
parent An entity that controls one or more entities.
power Existing rights that give the current ability to direct the relevant activities.
protective rights Rights designed to protect the interest of the party holding those rights without giving that party power over the entity to which those rights relate.
relevant activities For the purpose of this IFRS, relevant activities are activities of the investee that significantly affect the investeeβs returns
removal rights Rights to deprive the decision maker of its decisionmaking authority
subsidiary An entity that is controlled by another entity.
Disclosure
Consolidated Financial Statements, Joint Arrangements and Disclosure of Interests in Other Entities: Transition Guidance (Amendments to IFRS 10, IFRS 11 and IFRS 12) was approved for issue by the fourteen members of the International Accounting Standards Board.