The main characteristic of a structured entity according to IFRS 12 is that:
A) the parent entity must have more than 80% of voting rights in the structured entity in order to gain control;
B) voting or similar rights are not the dominant factor in deciding who controls the entity;
C) the legal acquirer of such entity will become the accounting acquiree;
D) it is controlled by two or more parent entities.

Question

Quizplus · Accepted Answer

According to IFRS 12, a structured entity is an entity that does not have equity shareholders or where the equity shareholders do not have voting rights or do not have the relevant support to make decisions about the entity's activities, and voting or similar rights are not the dominant factor in deciding who controls the entity. Therefore, choice B is the correct answer.

The Main Characteristic of a Structured Entity According to IFRS