Exam 15: Consolidation: Controlled Entities

Dragon Limited is an entity listed in Hong Kong.Dragon Limited holds a 100% investment in Aussie Pty Ltd,an Australian based company,who in turn holds a 90% interest in Bondi Pty Ltd.Aussie Pty Ltd and the Aussie group (comprising Aussie and Bondi)are both non-reporting entities.Which of the following statements is correct?

If an investor entity owns more than half of the voting or potential voting power of an investee and does not account for the investment as a subsidiary,AASB 12 Disclosure of Interests in Other Parties,requires that the following disclosure be made:

In a consolidated group of entities,control over the subsidiaries in the group:

According to AASB 10 Consolidated Financial Statements,the following factors indicate the existence of control: I.Possessing existing rights that give the current ability to direct the relevant activities II.Shared power in the governance of financial and operating policies of another entity so as to obtain benefits. III.The power to govern the operating policies of an entity so as to obtain benefits. IV.Ownership of more than 50% of the voting power in the subsidiary.