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Hi sir
The threshold for considering a sub
To be significant component is 15%Here zennor comp profits and assets less than 15% why its considered sig component?
Thanks
Significant component: a component identified by the group engagement team and that:
1. is of individual financial significance to the group; or
2. is likely to include significant risks of material misstatement of
the group financial statements (due to its specific nature or
circumstances).The 15% guideline relates to 1.
The published answer answers your question:
“Zennor is likely to be considered a significant component due to its risk profile and
the change in group structure which has occurred in the year.”Is the threshold of identifying significant component in Group different from significant company in a listed company? Because as I know for listed company, if its segment more than 10% of revenue or assets or Profit, it is significant component and should be disclosed separately?
They are different things:
The term “significant component” comes from ISA 600 in relation to ANY GROUP AUDIT (as I defined it above). A component will typically be a subsidiary.
10% is a threshold for disclosure of operating segments (see Chapter 17 of the SBR notes) in accordance with IFRS for LISTED entities only. A segment doesn’t have to have anything to do with the legal structure of entities – in theory, there could be just one legal entity (i.e. not a group), but it would still have segments (e.g. domestic/international, etc).
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