Page 14 - Finac2 Test 1 Slides - 1. Consolidated And Separate Financial Statements

CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS

Power over Investee: IFRS 10.10 - .14

• Definition of power:

• Existing rights that give the current ability to direct the relevant

activities

• Relevant activities:

• Activities that significantly affect the investee’s returns

• Depend on nature of investee

• Examples (B12):

• Establishing operating and capital decisions

• Appointing, remunerating and terminating key management personnel or
service providers

• Power comes from rights

• May be simple voting rights or complex arrangements

• Examples given in B15:

• Voting rights and potential voting rights
• Rights to appoint, reassign or remove key management personnel
• Rights to enter into or veto any changes to transactions
• Other rights which give the ability to direct the relevant activities

14