Change to the definition of control in IFRS 10

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Research Case: Control under IFRS 10

Change to the definition of control in IFRS 10

In   May   2011,   the   International   Accounting Standards   Board   (the   IASB)   issued   IFRS   10

Consolidated Financial Statements, which becomes effective for annual periods beginning on or after 1

January 2013.  The change to  the definition  of control  in  IFRS  10, Consolidated  Financial Statements [“IFRS 10”] is expected to have a significant effect on the investment management industry. Investment managers will have to apply the more comprehensive guidance in IFRS 10 when determining whether they control the entities they are involved with and consequently, whether they will need to consolidate those entities in their own financial statements. The main change introduced by IFRS 10 compared with the existing consolidation requirements is a greater focus on which investor has power over an investee’s activities rather than who has the majority of the voting rights.

Required:

Write between 1000-1500 words on the main aspect of this standard regarding the definition of control and on the main challenges that may face the application of the directives of this standard.

Resources

http://www2.deloitte.com/mt/en/pages/audit/articles/mt-audit-ifrs10.html#

http://www2.deloitte.com/content/dam/Deloitte/mt/Documents/audit/dt-mt-pub-

audit-ifrs-article-gcini-180113.pdf

http://www.pwc.com/gx/en/ifrs-reporting/pdf/IFRS_news_-_June_FINAL.pdf

http://www.cica.ca/focus-on-practice-areas/reporting-and-capital-markets/ifrs-

reporting-alerts-and-resources/item65856.pdf

http://www.mazars.com/mazarspage/download/120409/20834394/file/MAZARS_

Insight_IFRS_10.pdf

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