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Principles of consolidated financial statement Topic lists and Syllabus reference Three IFRSs Definitions The existence of control is generally evidenced by one of the following: p5 Group Structure Group accounts Principles of consolidation Requirements for consolidated financial statements: IAS27 13.Control is presumed to exist when the parent owns, directly or indirectly through subsidiaries, more than half of the voting power of an entity unless, in exceptional circumstances, it can be clearly demonstrated that such ownership does not constitute control. Control also exists when the parent owns half or less of the voting power of an entity when there is: (a) power over more than half of the voting rights by virtue of an agreement with other investors; (b) power to govern the financial and operating policies of the entity under a statute or an agreement; (c) power to appoint or remove the majority of the members of the board of directors or equivalent governing body and control of the entity is by that board or body; or (d) power to cast the majority of votes at meetings of the board of directors or equivalent governing body and control of the entity is by that board or body. Exemption from preparing group accounts A parent need not present consolidated financial statements if and only if all of the following hold: (a) wholly-owned subsidiary, a partially owned subsidiary (b) not publicly traded (c) not in the process of issuing securities (d) ultimate or intermediate parent IAS27 A parent need not present consolidated financial statements if and only if: (a) the parent is itself a wholly-owned subsidiary, or is a partially-owned subsidiary of another entity and its other owners, including those not otherwise entitled to vote, have been informed about, and do not object to, the parent not presenting consolidated financial statements; (b) the parent