Document ID: chunk:federal_register_of_legislation:F2025C00172:body:0:p76
Version: federal_register_of_legislation:F2025C00172
Segment Type: other
Provision Reference: 
Character Range: 197896–200842

the Australian Government has power (as described in the Standard) over the University, then the third control criterion linking power and returns is also not satisfied.  The Governments are able to affect the returns of the University, and thus their own indirect returns, through exercising their substantive rights.  However, the Governments are unable to direct the activities that most significantly affect the University's returns.

Control conclusion

The conclusion from the above assessment is that neither the State Government nor the Australian Government has power over the University and therefore neither Government controls the University.

In this case, the University would not be consolidated by any other entity.  The University Council as a group is not an investor as contemplated by the Standard.  It is akin to the board of directors of a company, that is, the Council is a part of the University itself.

Example IG4B

In this example, the facts are the same as in Example IG4A except that:

    * XYZ University is a research university with extensive commercial activities, and teaching activities that are limited to a small range of graduate and executive courses;

    * the University receives approximately 30% of its total revenue in the form of grants for various purposes, comprising 10% from the Australian Government and 20% from the State Government;

    * 50% of the total revenue is derived from commercial activities, and the balance of 20% from industry funding and course fees; and

    * the State Government requires all significant commercial activities and finance and property decisions of the University to be approved by the Minister.

Based on these revised facts and circumstances, the State Government's substantive rights in respect of the University's commercial activities and its finance and property matters have a much more significant role in the operations of the University than in Example IG4A.  The substantive rights may now be of such effect that the State Government has the current ability to direct the activities that significantly affect the University's returns.  In that case, the State Government would have power over the University as described in the Standard, satisfying the first control criterion.

As explained in Example IG4A, the State Government is exposed or has rights to variable returns from its involvement with the University, thus satisfying the second control criterion.

Finally, the State Government is able to use its power over the University's commercial activities to affect its returns from the University, thus meeting the third control criterion.

Control Conclusion

The conclusion from the above assessment is that in this case the State Government controls the University, assuming that the State Government's substantive rights give it the ability to direct the relevant activities of the University.

Implementation examples

Example IG5