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IFRS 10 & 3 - Coggle Diagram
IFRS 10 & 3
IFRS 10:
Consolidated Financial Statements
An investor
controls an investee when it is exposed, or has rights, to variable returns from its involvement with the investee
and has the
ability to affect those returns through its power over the investee
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Exposure, or rights to, variable returns
likely to receive returns on their investment through dividends and/or remuneration for services amongst other things
could be positive as a result of good performance, negative due to poor performance or the returns could be both negative and positive
Ability to affect returns through its power over the investee
directly reap the benefits of the returns made by
Power
Voting rights associated with those shares, so they do have existing rights through owning these shares
holds a majority stake
Business Combination: A transaction or other event in which an acquirer obtains control of one or more businesses.
In order to determine if this definition is met, the requirements for control are as per IFRS 10 must be determined and existence of an acquirer confirmed
Definition of an ‘acquirer’
The entity that obtains control over the acquiree
does qualify to be defined as the acquirer in this transaction as they do have control over Studio 88 as discussed above
IFRS 3: Business Combinations
Definition of a ‘business’
A business is an
integrated set of activities and assets
that is able of being conducted and managed
for the purpose of providing goods or services to customers
generating investment income or
generating other income from ordinary activities
That is
able of being conducted
and managed
for the purpose of providing goods or services
to customers
they provide goods and services in the form of xxx that is sold on xxx to other customers
Generating
investment income
or generating other income from ordinary activities
they generate income through xxx which is the ordinary activities that they conduct
A business is an
integrated set of activities
and assets,
they conduct activities of
They conduct this activities using xxx assets
Company xxx is therefore a business a per the defintion above