Sub-subsidiary
An ultimate parent assesses control under IFRS 10 and consolidates entities it controls, including through an intermediate subsidiary, subject to applicable exceptions. Calculate economic interests and non-controlling interests with care at each ownership level. Intragroup balances and transactions are eliminated for the group as a whole. Percentage ownership alone does not replace the assessment of power, variable returns and linkage.
Worked example
Parent P owns 80% of subsidiary S, and S owns 75% of company T. If P controls S and the group controls T, T is an indirect subsidiary. P’s indirect economic interest through S is 80% × 75% = 60%, before other interests.
Common mistake
Treating the parent’s 60% indirect economic interest as a substitute for the control analysis, or forgetting non-controlling interests at both levels.
Where it appears in your exams
| Qualification | Exam | Relationship | Period |
|---|---|---|---|
| ACCA | FR | Supporting | September 2026–June 2027 |
| ACCA | SBR | Direct | September 2026–June 2027 |