Page 241 - F2 Integrated Workbook STUDENT 2019

Basic group accounts (F1 revision)

Introduction to group accounts

1.1 What is a group?

A group exists where one company CONTROLS another company.

1.2 What is control?

®
Control is defined by IFRS 10 Consolidated financial statements. Per IFRS 10,
control is achieved when the investor has:

 ‘power over the investee (achieved when owning > 50% of voting rights)

 exposure, or rights, to variable returns from its involvement in investee

 the ability to use its power to affect the amount of variable returns.’(IFRS
10 para 7)

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