question archive According to AASB 10/IFRS 10 Consolidated Financial Statements, which of the following factors indicate the existence of control? I
According to AASB 10/IFRS 10 Consolidated Financial Statements, which of the following factors indicate the existence of control? I
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According to AASB 10/IFRS 10 Consolidated Financial Statements, which of the following factors indicate the existence of control?
I. Possessing existing rights that give the current ability to direct the relevant activities.
II. Shared power in the governance of financial and operating policies of another entity so as to obtain benefits.
III. The power to have significant influence over the operating policies of an entity so as to obtain benefits.
IV. Ownership of more than 50% of the voting rights in the subsidiary.
Select one:
I and IV only
I, II and III only
II and IV only
IV only
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A is the answer. If entity is presumably to have more than 50% of voting rights , it usually has the say already as to how it wants the company to go through , its decision is usually to follow since it has the highest ownership of share thus obtaining control, no sharing .
B indicates "joint control " which means , joint venture which is tackled by other standard.
C indicates " associate " , which has significant influence from the company decisions presumably by obtaining 20% to 50% of voting rights.
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