AASB 10 Consolidated Financial Statements
The Australian adoption of IFRS 10: when a parent must present consolidated statements and the Australian exemption rules, the three-element control model (power over relevant activities, exposure to variable returns, and the link between them, including principal and agent analysis), consolidation procedures, non-controlling interests, loss of control, the investment entity exception, and guidance for not-for-profit entities.
AASB 10 Consolidated Financial Statements is a compliance framework from Australia (Commonwealth) with 5 domains and 22 controls. The largest domains are Assessing control: power, returns and the link between them (paragraphs 5 to 18, B2 to B85) – AASB 10 Consolidated Financial Statements (10 controls), Accounting requirements: consolidation procedures, non-controlling interests and loss of control (paragraphs 19 to 26, B86 to B99A) – AASB 10 Consolidated Financial Statements (6 controls), Investment entities: status and the exception to consolidation (paragraphs 27 to 33, B85A to B85W, B100 and B101) – AASB 10 Consolidated Financial Statements (3 controls). Every control below carries what it requires and what an assessor expects to see.
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Framework Domains (5)
Accounting requirements: consolidation procedures, non-controlling interests and loss of control (paragraphs 19 to 26, B86 to B99A) – AASB 10 Consolidated Financial Statements
| Code | Title |
|---|---|
| aasb-10-consolidated-financial-statements::19-21,B86-B88 | Consolidation procedures: combine like items, eliminate the parent's investment against its share of equity, remove intragroup balances and transactions in full, apply uniform policies, and include a subsidiary from the date control is gained to the date it is lost |
| aasb-10-consolidated-financial-statements::22-24,B94-B96 | Non-controlling interests: present them in equity separately from the parent's owners, attribute profit, each component of other comprehensive income and total comprehensive income to them even into deficit, and treat ownership changes without loss of control as equity transactions |
| aasb-10-consolidated-financial-statements::25-26,B97-B99 | Loss of control: derecognise the former subsidiary's net assets and the outside owners' interest, recognise consideration, any distribution and the retained interest at fair value, recycle or transfer OCI as if assets were sold directly, recognise the gain or loss, and treat linked arrangements as one |
| aasb-10-consolidated-financial-statements::B89-B91 | Potential voting rights in the allocation of profit and equity: allocate between parent and non-controlling interests on present ownership, unless an instrument already gives access to the returns, in which case reflect its eventual exercise and keep it outside AASB 9 |
| aasb-10-consolidated-financial-statements::B92-B93 | Reporting dates: consolidate subsidiaries at the parent's reporting date, using additional information prepared at that date unless impracticable, and otherwise adjust for significant events with a gap of no more than three months kept consistent |
| aasb-10-consolidated-financial-statements::B99A | Loss of control of a subsidiary without a business to an equity-accounted associate or joint venture: recognise the gain or loss, and the remeasurement of any retained equity-accounted interest, only to the extent of unrelated investors' interests (mandatory from 2028) |
Assessing control: power, returns and the link between them (paragraphs 5 to 18, B2 to B85) – AASB 10 Consolidated Financial Statements
| Code | Title |
|---|---|
| aasb-10-consolidated-financial-statements::10-14,B9-B13 | Power and relevant activities: identify the activities that most significantly drive the investee's returns and who has the existing rights, exercised or not, giving the current ability to direct them |
| aasb-10-consolidated-financial-statements::15-16,B55-B57 | Exposure to variable returns: judge whether the investor's returns can vary with the investee's performance, by substance rather than legal form, including fees, residual interests, tax and synergy benefits |
| aasb-10-consolidated-financial-statements::17-18,B58-B72 | Link between power and returns, principal or agent: a decision maker acting as agent for others does not control; decide by the scope of authority, others' rights (especially single-party removal rights), remuneration and other interests |
| aasb-10-consolidated-financial-statements::5-9,B80-B85 | Control assessment and reassessment: whatever the form of involvement, decide whether you control each investee using all three elements and all facts, recognise collective control as no control, and reassess whenever a change affects any element |
| aasb-10-consolidated-financial-statements::B14-B21 | Rights that confer power and supporting evidence: weigh voting, appointment, removal, transaction-direction and management-contract rights, and where rights alone are unclear look for practical ability, special-relationship indicators and the size of exposure |
| aasb-10-consolidated-financial-statements::B22-B33 | Substantive versus protective rights: count only rights their holder can in practice use when decisions are due, disregard rights that only protect the holder's interests (including typical franchisor rights), and remember removal rights of other parties |
| aasb-10-consolidated-financial-statements::B34-B50 | Voting rights: a majority confers power unless other arrangements or non-substantive rights defeat it; a minority may confer de facto power through size and dispersion of holdings; potential voting rights count when substantive |
| aasb-10-consolidated-financial-statements::B51-B54 | Investees not governed by votes: consider the purpose and design, involvement at set-up, contractual arrangements at inception, and rights that crystallise on particular events, and weigh any explicit or implicit commitment to keep the investee operating |
| aasb-10-consolidated-financial-statements::B73-B75 | Relationships with other parties: treat parties acting on the investor's behalf, de facto agents such as related parties, people whose dealings in the investee need the investor's approval, and those funded or governed by the investor, as part of the control assessment |
| aasb-10-consolidated-financial-statements::B76-B79 | Control of specified assets (silos): treat a ring-fenced part of an investee as its own deemed entity only when its assets are the only source for its specified liabilities and others have no rights to them, then test control of that portion |
Investment entities: status and the exception to consolidation (paragraphs 27 to 33, B85A to B85W, B100 and B101) – AASB 10 Consolidated Financial Statements
| Code | Title |
|---|---|
| aasb-10-consolidated-financial-statements::27-30,B85A-B85W | Investment entity status: determine whether the parent obtains funds to provide investment management services, commits to investing solely for capital appreciation or investment income, and measures substantially all investments at fair value, weighing the typical characteristics and reassessing on change |
| aasb-10-consolidated-financial-statements::31-33,4B | Investment entity exception: carry subsidiaries at fair value, with changes in profit or loss, instead of consolidating, except subsidiaries that are not investment entities and mainly provide investment-related services, and ensure a non-investment-entity parent consolidates everything it controls |
| aasb-10-consolidated-financial-statements::B100-B101 | Change in investment entity status: on ceasing to be one, treat the date as a deemed acquisition of each fair-valued subsidiary under AASB 3 using fair value as deemed consideration; on becoming one, stop consolidating at that date and apply the loss of control requirements |
Not-for-profit application (Appendix E implementation guidance) – AASB 10 Consolidated Financial Statements
| Code | Title |
|---|---|
| aasb-10-consolidated-financial-statements::AppE-IG4-IG24 | Not-for-profit control analysis: find power in statutory, administrative and constitutional rights (policy directions, budget approval or veto), treat regulatory and probity-based removal powers as protective unless they let the holder direct relevant activities, count non-financial returns, and do not equate funding dependence or shared objectives with control |
Objective, scope and the exemption from presenting consolidated statements (paragraphs 1 to 4B, Aus4.1, Aus4.2, AusCF paragraphs) – AASB 10 Consolidated Financial Statements
| Code | Title |
|---|---|
| aasb-10-consolidated-financial-statements::4(a) | Exemption from consolidating: a parent may skip group statements only if all four tests are met (owners informed without objection, no publicly traded instruments, no filing to issue in a public market, and a higher parent publishing IFRS-compliant consolidated or fair-value statements) |
| aasb-10-consolidated-financial-statements::Aus4.1-Aus4.2 | Australian modifications to the exemption: tier and sector combinations that may still use it, and the ultimate Australian parent that must consolidate when legislation requires compliant statements (or, for AusCF entities, when the parent or group is a reporting entity) |
What is AASB 10 Consolidated Financial Statements and who does it apply to?
AASB 10 Consolidated Financial Statements is a compliance framework from Australia (Commonwealth) with 5 domains and 22 controls. The Australian adoption of IFRS 10: when a parent must present consolidated statements and the Australian exemption rules, the three-element control model (power over relevant activities, exposure to variable returns, and the link between them, including principal and agent analysis), consolidation procedures, non-controlling interests, loss of control, the investment entity exception, and guidance for not-for-profit entities. It is used by organisations to establish and maintain compliance with industry standards and regulatory requirements.
What does AASB 10 Consolidated Financial Statements actually require?
AASB 10 Consolidated Financial Statements has 22 controls organised across 5 domains. The largest domains are Assessing control: power, returns and the link between them (paragraphs 5 to 18, B2 to B85) – AASB 10 Consolidated Financial Statements (10 controls), Accounting requirements: consolidation procedures, non-controlling interests and loss of control (paragraphs 19 to 26, B86 to B99A) – AASB 10 Consolidated Financial Statements (6 controls), Investment entities: status and the exception to consolidation (paragraphs 27 to 33, B85A to B85W, B100 and B101) – AASB 10 Consolidated Financial Statements (3 controls). Each control defines specific requirements that organisations must implement to achieve compliance.
If I already comply with another framework, how much of AASB 10 Consolidated Financial Statements do I already cover?
AASB 10 Consolidated Financial Statements does not currently have cross-framework mappings in our system. Check back as we continuously expand our mapping database.
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