X(Mauritius) Ltd is an entity incorporated in Mauritius.
X(Zambia) Ltd is an entity incorporated in Zambia.
The shareholders of X(Mauritius) Ltd and X(Zambia) Ltd are the same persons ie,Mr Peter, Mr Andrew and Investment Holding Ltd and hold shares in both companies in the same proportion- .
--------- Director of X(Mauritius) Ltd Director of X(Zambia) Ltd
Mr Peter (shareholder) Yes Yes
Mr Andrew (shareholder) Yes Yes
Mr Henry Yes Yes
Mr John No Yes
(1) Mr Peter/Andrew/Henry represents 100% shareholding of both X(Mauritius) Ltd and X(Zambia) Ltd.
(2) Management team of X(Mauritius) Ltd and X(Zambia) Ltd is the same.
(3) X(Mauritius) Ltd has full control over the board of directors of X(Zambia) Ltd. X(Mauritius) Ltd subcontracts most of its activities to X(Zambia) Ltd.
(4) No direct shareholding of X(Mauritius) Ltd in X(Zambia) Ltd.
Question:
Is there a need to consolidate the financial statement of X(Zambia) Ltd into X(Mauritius) Ltd under IFRS10?
Thanks
Xerxes
IFRS 10- Consolidation requirements
Re: IFRS 10- Consolidation requirements
I don't think so. there seems to be no exposure, or rights, to variable returns
https://ifrscommunity.com/knowledge-bas ... le-returns
https://ifrscommunity.com/knowledge-bas ... le-returns
Re: IFRS 10- Consolidation requirements
There was another poster from Africa who said that locally they consolidate if natural persons are the common controlling party, ie not with a parent company, in case relevant.
Re: IFRS 10- Consolidation requirements
good point, local law may impose requirements on the top of IFRS 10
Re: IFRS 10- Consolidation requirements
Thank you for your reply.
Just got back from holidays.
I have another question.
The directors of X (Mauritius) Ltd have absolute power over the running/management of X (Zambia) Ltd (the investee) and exposure or rights to variable return from their involvement. They have the ability to use their power to affect the return from its involvement with X (Zambia) Ltd (the investee).
Ques:
-Under these conditions, must X (Mauritius) Ltd consolidate X (Zambia) Ltd in its financial statements (as per IFRS 10)?
-If so, how is the set off of equity/investment carried out at the consolidation stage.
Just got back from holidays.
I have another question.
The directors of X (Mauritius) Ltd have absolute power over the running/management of X (Zambia) Ltd (the investee) and exposure or rights to variable return from their involvement. They have the ability to use their power to affect the return from its involvement with X (Zambia) Ltd (the investee).
Ques:
-Under these conditions, must X (Mauritius) Ltd consolidate X (Zambia) Ltd in its financial statements (as per IFRS 10)?
-If so, how is the set off of equity/investment carried out at the consolidation stage.
Re: IFRS 10- Consolidation requirements
if all conditions are met, you need to consolidate unless the exemption for investment entities applies:
https://ifrscommunity.com/knowledge-bas ... t-entities
if there is no interest in consolidated subsidiary, I suppose you would have non-controlling interest representing 100% interest in the subsidiary
PS.Have you read this section?:
https://ifrscommunity.com/knowledge-bas ... l-vs-agent
https://ifrscommunity.com/knowledge-bas ... t-entities
if there is no interest in consolidated subsidiary, I suppose you would have non-controlling interest representing 100% interest in the subsidiary
PS.Have you read this section?:
https://ifrscommunity.com/knowledge-bas ... l-vs-agent
Re: IFRS 10- Consolidation requirements
Thanks a lot.
This has clarified things.
This has clarified things.