Consolidation
28 August 2008
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Company A holds total control over the board of directors of company B. But it does not have any voting rights in the company B.
Is company A required to consolidate the results of company B with its own results.
If yes, what is the share of results to be included for line by line consolidation.
If yes, what is the share of results to be included for line by line consolidation.
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Regards,
As per IFRS 27, Parent Company should have more than half of the voting rights of the subisdairy company for consolidation.
Following should be taken into consideration for substantive operating companies:
Own more than 50 percent of the voting power of an entity
Have power to control greater than 50 percent of the voting rights via agreement with other investors
Have the power to govern finacial and operating policies of the entity under a statute or an agreement
Have power to cast the majority of the votes at the meetings of the BOD or equivalent governing body and control of the entity is by that board or body.
Have power to appoint or remove the majority of BOD or equivalent governing body and control of the entity is by that board or body.
Have power to control greater than 50 percent of the voting rights via agreement with other investors
Have the power to govern finacial and operating policies of the entity under a statute or an agreement
Have power to cast the majority of the votes at the meetings of the BOD or equivalent governing body and control of the entity is by that board or body.
Have power to appoint or remove the majority of BOD or equivalent governing body and control of the entity is by that board or body.
If yes to any one of them above then should consolidate,
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