Document ID: chunk:federal_register_of_legislation:F2025C00172:body:0:p95
Version: federal_register_of_legislation:F2025C00172
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10) over the investee.  The Board noted that it could be difficult to distinguish substantive rights from protective rights held by an investor in relation to an investee.  Therefore, the Board decided to note in the introduction to the comprehensive examples that distinguishing substantive and protective rights requires analysis of the circumstances, including considering the reasons for different investors holding various rights in relation to the investee.  The Board also decided to include a range of scenarios in most of the comprehensive examples to illustrate that alternative outcomes for the assessment of control by the investor reflect the facts and circumstances in any particular case.
BC18 The Board included specific comprehensive examples in respect of a local government (Example IG3) and a university (Example IG4), given the anticipated uncertainty in respect of how AASB 10 might apply in determining whether such entities are controlled by another entity.  Two scenarios under which different control conclusions might be drawn are presented in the university example, whereas the local government example includes only one case, in which it is concluded that the local government is not controlled by another government.  The Board took the view that this would be the normal outcome in relation to local governments under current arrangements in Australia, but noted in paragraph IG8 and at the end of Example IG3 that the assessment of whether a local government is controlled by another government would depend on the particular facts and circumstances.
BC19 Given the types of arrangements often found in the public sector, the Board also decided that an example concerning delegated powers and agency relationships affecting public sector entities would be useful guidance.  Example IG5 presents two scenarios regarding whether a government department controls a statutory authority.  The example might be relevant in some jurisdictions but not in others.

Former guidance in superseded AASB 127
BC20 The Board reviewed the specific public sector guidance in the superseded AASB 127 Consolidated and Separate Financial Statements (paragraphs Aus17.1–Aus17.10) in the context of the three criteria for control set out in AASB 10: power, returns, and a link between power and returns.  Some of the guidance in the superseded AASB 127 was not incorporated into Appendix E, on the grounds that the Board considered that it was either inconsistent with or beyond the scope of the requirements of AASB 10 or no longer necessary.  The following paragraphs address the major aspects of the guidance in the superseded AASB 127.
BC21 Paragraph Aus17.1 stated that AASB 127 did not attempt to identify all groups and reporting entities in the public sector.  Nevertheless, paragraph Aus17.5 described the nature of some reporting entities in the public sector.  Paragraph Aus17.7 also discussed identifying economic entities