Consolidated Financial Statements

In April 2001 the International Accounting Standards Board (Board) adopted IAS 27 Consolidated Financial Statements and Accounting for Investments in Subsidiaries, which had originally been issued by the International Accounting Standards Committee in April 1989. IAS 27 replaced most of IAS 3 Consolidated Financial Statements (issued in June 1976).

In December 2003, the Board amended and renamed IAS 27 with a new title—Consolidated and Separate Financial Statements. The amended IAS 27 also incorporated the guidance contained in two related Interpretations (SIC-12 Consolidation-Special Purpose Entities and SIC-33 Consolidation and Equity Method—Potential Voting Rights and Allocation of Ownership Interests).

In May 2011 the Board issued IFRS 10 Consolidated Financial Statements to supersede IAS 27. IFRS 12 Disclosure of Interests in Other Entities, also issued in May 2011, replaced the disclosure requirements in IAS 27. IFRS 10 incorporates the guidance contained in two related Interpretations (SIC-12 Consolidation-Special Purpose Entities and SIC-33 Consolidation).

In June 2012 IFRS 10 was amended by Consolidated Financial Statements, Joint Arrangements and Disclosure of Interests in Other Entities: Transition Guidance (Amendments to IFRS 10, IFRS 11 and IFRS 12). These amendments clarified the transition guidance in IFRS 10. Furthermore, these amendments provided additional transition relief in IFRS 10, limiting the requirement to present adjusted comparative information to only the annual period immediately preceding the first annual period for which IFRS 10 is applied.

In October 2012 IFRS 10 was amended by Investment Entities (Amendments to IFRS 10, IFRS 12 and IAS 27), which defined an investment entity and introduced an exception to consolidating particular subsidiaries for investment entities. It also introduced the requirement that an investment entity measures those subsidiaries at fair value through profit or loss in accordance with IFRS 9 Financial Instruments in its consolidated and separate financial statements. In addition, the amendments introduced new disclosure requirements for investment entities in IFRS 12 and IAS 27.

In September 2014 IFRS 10 was amended by Sale or Contribution of Assets between an Investor and its Associate or Joint Venture (Amendments to IFRS 10 and IAS 28), which addressed the conflicting accounting requirements for the sale or contribution of assets to a joint venture or associate. In December 2015 the mandatory effective date of this amendment was indefinitely deferred by Effective Date of Amendments to IFRS 10 and IAS 28.

In December 2014 IFRS 10 was amended by Investment Entities: Applying the Consolidation Exception (Amendments to IFRS 10, IFRS 12 and IAS 28). These amendments clarified which subsidiaries of an investment entity should be consolidated instead of being measured at fair value through profit or loss. The amendments also clarified that the exemption from presenting consolidated financial statements continues to apply to subsidiaries of an investment entity that are themselves parent entities. This is so even if that subsidiary is measured at fair value through profit or loss by the higher level investment entity parent.

Other Standards have made minor consequential amendments to IFRS 10, including Annual Improvements to IFRS Standards 2014–2016 Cycle (issued December 2016) and Amendments to References to the Conceptual Framework in IFRS Standards (issued March 2018).

CONTENTS

from paragraph

INTERNATIONAL FINANCIAL REPORTING STANDARD 10

CONSOLIDATED FINANCIAL STATEMENTS

OBJECTIVE 1

Meeting the objective 2

SCOPE 4

CONTROL 5

Power 10

Returns 15

Link between power and returns 17

ACCOUNTING REQUIREMENTS 19

Non-controlling interests 22

Loss of control 25

DETERMINING WHETHER AN ENTITY IS AN INVESTMENT ENTITY 27

INVESTMENT ENTITIES: EXCEPTION TO CONSOLIDATION 31

APPENDICES

A Defined terms

B Application guidance

C Effective date and transition

D Amendments to other IFRSs

APPROVAL BY THE BOARD OF IFRS 10 ISSUED IN MAY 2011

APPROVAL BY THE BOARD OF AMENDMENTS TO IFRS 10:

Consolidated Financial Statements, Joint Arrangements and Disclosure of Interests in other Entities: Transition Guidance (Amendments to IFRS 10, IFRS 11 and IFRS 12) issued in June 2012

Investment Entities (Amendments to IFRS 10, IFRS 12 and IAS 27) issued in October 2012

Sale or Contribution of Assets between an Investor and its Associate or Joint Venture (Amendments to IFRS 10 and IAS 28) issued in September 2014

Investment Entities: Applying the Consolidation Exception (Amendments to IFRS 10, IFRS 12 and IAS 28) issued in December 2014

Effective Date of Amendments to IFRS 10 and IAS 28 issued in December 2015

FOR THE ACCOMPANYING GUIDANCE LISTED BELOW, SEE PART B OF THIS EDITION

• ILLUSTRATIVE EXAMPLES
• AMENDMENTS TO THE GUIDANCE ON OTHER IFRSS

FOR THE BASIS FOR CONCLUSIONS, SEE PART C OF THIS EDITION

• BASIS FOR CONCLUSIONS
• APPENDICES TO THE BASIS FOR CONCLUSIONS
• Previous Board approvals and dissenting opinions
• Amendments to the Basis for Conclusions on other IFRSs

International Financial Reporting Standard 10 Consolidated Financial Statements (IFRS 10) is set out in paragraphs 1–33 and Appendices A–D. All the paragraphs have equal authority. Paragraphs in bold type state the main principles. Terms defined in Appendix A are in italics the first time they appear in the Standard. Definitions of other terms are given in the Glossary for International Financial Reporting Standards. IFRS 10 should be read in the context of its objective and the Basis for Conclusions, the Preface to IFRS Standards and the Conceptual Framework for Financial Reporting. IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors provides a basis for selecting and applying accounting policies in the absence of explicit guidance.