Note: All the materials in this blog post have been made available to the public for free download by the respective sources. They are compiled here for ease of access to you.
IFRS 10 Consolidated financial statements is one of the most important standards used by public companies listed on the stock exchange. This is because it largely impacts how companies that own other companies report the ownership interest in their financial statements.
When you buy shares in a company, there is a silent rule that indicates that the percentage of shares you buy in the company determines how you assess your investment in the company. This rule generally categorizes your interest in the company as follows:
% of shares | Type of investment | Applicable standard |
---|---|---|
< 20% | Ordinary share | IFRS 9 |
20% or <50% | Associate | IAS 28 |
50% | Joint venture | IFRS 11 |
>50% | Subsidiary | IFRS 10 |
Company A owns 40% of the shares in Company B. Company A can appoint the CEO of Company B and decide on major investments.Even though Company A does not own a majority, they have the power to control how Company B operates. As such, under IFRS 10, Company A would likely need to consolidate Company B's financial results with their own. This means combining Company B's assets, liabilities, revenues, and expenses to theirs to show a single financial picture for the group (Company A - the parent; Company B - the subsidiary).
IFRS 10 Pdf
Source: BDO
Source: Grant Thornton
Grant Thornton IFRS 10 Consolidated financial statements pdf
IFRS 10 eLearn
Source: Deloitte
IFRS 10 Consolidated financial statements eLearn
Consolidated financial statements
Illustrative financial statements
IFRS 10 Standard
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