Structured entity
Relevant activities may be directed by contractual arrangements, while voting rights relate only to administrative tasks. Assess control using IFRS 10’s power, variable returns and linkage criteria, considering all relevant rights and circumstances. IFRS 12 requires specified disclosures about interests in structured entities. A special-purpose label alone does not establish control or exemption from consolidation.
Worked example
A securitisation vehicle has limited activities and contractual arrangements determine the decisions affecting its returns. An investor assesses those rights and its exposure to returns to determine whether it controls the vehicle.
Common mistake
Assuming a vehicle is excluded from consolidation merely because it is a separate legal entity or has no conventional voting majority.
Where it appears in your exams
| Qualification | Exam | Relationship | Period |
|---|---|---|---|
| ACCA | FR | Supporting | September 2026–June 2027 |
| ACCA | SBR | Direct | September 2026–June 2027 |