Topic 4 - Control

Question 1

Which AABS standard covers control?

Answer 1

AASB 10

Question 2

What three things are needed for control to exist?

Answer 2

1. Power
2. Exposure, rights to, variable returns
3. Link between power and returns

Question 3

What three aspects show power over the invest?

Answer 3

• Existing rights that give the investor
• the current ability to direct
• the relevant activities

Question 4

When is there a presumption of power?

Answer 4

if investors holds more than 50% of the voting rights (para B35) not definitive

Question 5

which type of entities may be exempt from control definition?

Answer 5

1. ‘Investment entities’ exempted from consolidation (para. 27, paras. B85A-85M)
2. Implementation guidance for not-for-profit
   entities (Appendix E)