Group Accounts -> FIRS 12- Disclosure of Interest in other entities

Question 1

What is IFRS 12 used for

Answer 1

Its a standard which contains disclosure requirements for group accounting (ie. Subsidiaries, associates, Joint Arrangements, uncosolidated ‘structured entities).

Question 2

Why is IFRS 12 designed?

Answer 2

Designed to improve the ability of userts of financial statements to evaluate the nature of interests in other entities and to assess the risk of these interests

Question 3

What is a structured entity?

Answer 3

An entity is designed so that voting rights are not the dominant factor in deciding who controls the entity - instead contractual arrangements are used to direct the entity’s activities. (aka special purporse entities).

Question 4

What are the typical features of a structured entity?

Answer 4

Activities are not directed using voting rights - instead are governed by a contract

Activities are often restrited and objective of the acitivity is narrow