Revision question on IFRS 3 (NBAA, C1, NOV 2018)



Three parties A, B and C establish a separate legal entity (entity X) in which the three parties have different shares of voting rights. Entity X’s activities constitute a business (as defined in IFRS 3: Business Combination). The parties A, B and C have 50%, 25% and 25% voting rights respectively in entity X. A contractual arrangement entered into by the three parties specifies that at least 75% of votes are required to make decisions about the relevant activities.



REQUIRED:

Assess the appropriate accounting treatment of entity X by each of the three parties A, B and C with reference to their agreements on matters of voting and decisions.

Leave a Comment

Your email address will not be published. Required fields are marked *

%d bloggers like this: