Page 4 - 2018 Finac2 Test 3 Slides - Change In Degree Of Control

CHANGES IN DEGREE OF CONTROL

Introduction

• An investor may increase or decrease its existing

interest in the net assets of an investee by means of

various corporate actions.

• This change in interest should be reflected in the

financial statements as it results in a change in interest

that the investor has in the net asset value of the

investee.

• The objective of this learning unit is to illustrate the

circumstances under which the investor’s interest in an

investee changes and how such changes are accounted

for in the separate and consolidated financial

statements of the investor.

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