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In May2011, the International Accounting Standards Board (the IASB) issued IFRS10 "Consolidated Financial Statements" which replaced IAS27 "Consolidated and Separate Financial Statements" and becomes effective for annual periods beginning on or after01/01/2013.
The new definition of concept of control as per IFRS10 has a greater focus on "which investor has power over an investee's activities" rather than 'who has the majority of the voting rights".
Thus, it seeks to look more into substance over form as it appears from a prima-facie observation.
More judgement would be required now to determine whether an investor has control - to be determined on a case-to-case basis.
A thorough reading of the below mentioned definitions would make the concept easy to understand-
NEW - As per IFRS10 (Consolidated Financial Statements) -
An investor must possess all of the following elements to be deemed to control an investee:
NOW STANDS REPLACED - As per IAS27 (Consolidated and Separate Financial Statements) -
Control is presumed when the parent acquires more than half of the voting rights of the entity. Even when more than one half of the voting rights is not acquired, control may be evidenced by power: [IAS27.13]