New development summary: IFRS 10 Consolidated Financial Statements—Quick reference guides


This new development summary provides three “quick reference guides” aimed to assist users with the decision process when applying the requirements within IFRS10 Consolidated Financial Statements and to provide a high-level summary of the key assessments required to apply the new control model.

The three guides assist in the following areas:

  • applying the control principle,
  • assessment of principal versus agent, and transition guidance.


In May 2011, the International Accounting Standards Board introduced IFRS 10 Consolidated Financial Statements which establishes principles for the presentation and preparation of consolidated financial statements when an entity controls one or more other entities. IFRS 10 provides a revised framework to assess when one entity controls another by redefining “control” and providing extensive guidance on how to apply the control principle to determine the scope of consolidation. IFRS 10 applies both to traditional entities and to special purpose (or structured) entities and replaces the corresponding requirements of both IAS 27 Consolidated and Separate Financial Statements and SIC-12 Consolidation—Special Purpose Entities. The standard is effective for annual periods beginning on or after January 1, 2013.

IFRS 10 is unlikely to affect the scope of consolidation in simple situations involving control through ownership of a majority of the voting rights in an investee. However, more complex and borderline control assessments will need to be reassessed and some will need to be revised. But, the requirements of the mechanics of consolidation (uniform accounting policies, eliminations, etc.), accounting for non-controlling interests and accounting for the loss of control remain the same.


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