Start Consolidating company financials

Consolidating company financials

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Because an investment entity is not required to consolidate its subsidiaries, intragroup related party transactions and outstanding balances are not eliminated [IAS 24.4, IAS 39.80].

[IFRS 10: B94] Changes in ownership interests Changes in a parent's ownership interest in a subsidiary that do not result in the parent losing control of the subsidiary are equity transactions (i.e.

transactions with owners in their capacity as owners).

[IFRS ] An entity is required to consider all facts and circumstances when assessing whether it is an investment entity, including its purpose and design.

IFRS 10 provides that an investment entity should have the following typical characteristics [IFRS ]: The absence of any of these typical characteristics does not necessarily disqualify an entity from being classified as an investment entity.

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.

[IFRS 10: B88] The parent and subsidiaries are required to have the same reporting dates, or consolidation based on additional financial information prepared by subsidiary, unless impracticable.