Vertical group
For example, a parent controls a subsidiary that in turn controls another entity. Determine control and economic interests at each level, and consolidate controlled entities under IFRS 10 subject to its requirements. Distinguish a horizontal structure in which the parent owns separate subsidiaries directly. Ownership percentages help compute economic interests but do not alone replace the control assessment.
Worked example
P controls S, and S controls T. The P–S–T chain is a vertical group structure; T is an indirect subsidiary of P if P controls the group’s relevant rights and returns.
Common mistake
Calling several subsidiaries held directly by one parent a vertical chain, or assuming every indirect ownership interest proves control.
Where it appears in your exams
| Qualification | Exam | Relationship | Period |
|---|---|---|---|
| ACCA | FR | Supporting | September 2026–June 2027 |
| ACCA | SBR | Supporting | September 2026–June 2027 |
