📖 Overview
IFRS 10 establishes principles for the presentation and preparation of consolidated financial statements when an entity controls one or more other entities. Control is the basis for consolidation.
🎯 Scope
Applies to all entities that prepare consolidated financial statements. Defines control and how to apply the control concept to identify whether an investor controls an investee.
⚙️ Key Principles
1. Control: An investor controls an investee when it has power over the investee, exposure to variable returns, and the ability to use power to affect returns.
2. Power: Existing rights that give the ability to direct relevant activities.
3. Consolidation: Parent consolidates all subsidiaries (assets, liabilities, equity, income, expenses) line by line.
4. Non-controlling interests (NCI): Presented in equity, separate from parent shareholders.
📏 Measurement
Assets and liabilities measured at fair value at acquisition date. Non-controlling interest measured at fair value or proportionate share of net assets. Goodwill = consideration + NCI - net identifiable assets.
✅ Recognition
Subsidiary recognized when control is obtained. Derecognized when control is lost. Intercompany transactions, balances, and unrealized profits/losses are eliminated in full.
📊 Presentation
Consolidated financial statements present the group as a single economic entity. NCI presented within equity. Loss of control: gain/loss recognized in income statement.
📝 Disclosure Requirements
Disclose: Nature of relationship between parent and subsidiaries, restrictions on transferring funds, changes in ownership, loss of control details, NCI information, and any contingent liabilities.
🔗 Related Standards
IFRS 3 (Business Combinations), IFRS 12 (Disclosure of Interests), IAS 27 (Separate Financial Statements)