According to AASB 10 Consolidated Financial Statements,which of the following factors indicate the existence of control?
I.Possessing existing rights that give the current ability to direct the relevant activities.
II.Shared power in the governance of financial and operating policies of another entity so as to obtain benefits.
III.The power to have significant influence over the operating policies of an entity so as to obtain benefits.
IV.Ownership of more than 50% of the voting rights in the subsidiary.
A)I,II and III only
B)I and IV only
C)II and IV only
D)IV only

Question

Quizplus · Accepted Answer

According to AASB 10, control exists when an entity has the power to direct the relevant activities of the other entity, which includes the power to govern the financial and operating policies of that entity, and when it is exposed, or has rights, to variable returns from its involvement with the entity and has the ability to use its power to affect those returns. Ownership of more than 50% of the voting rights in the subsidiary indicates the existence of control, while shared power in the governance of financial and operating policies only indicates joint control, and significant influence over operating policies indicates the ability to exercise influence, but not control. Possessing existing rights that give the current ability to direct the relevant activities also indicates control. Therefore, the correct choice is B (I and IV only).

According to AASB 10 Consolidated Financial Statements,which of the Following