Document ID: chunk:federal_register_of_legislation:F2025C00172:body:0:p94
Version: federal_register_of_legislation:F2025C00172
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Character Range: 247667–250735

incorporates IFRS 10, issued by the International Accounting Standards Board (IASB), the text of the body of AASB 10 and Appendices A–C is expressed from the perspective of for-profit entities in the private sector.  The Board considered that some of the terminology in the Standard does not readily translate to a not-for-profit perspective and decided that it would be useful to explain that terminology for application in a not-for-profit context, rather than revise the terminology in some way for not-for-profit entities.  The terms 'investor' and 'investee', for example, figure prominently in AASB 10, including in the definition of control, and are described in general terms in paragraph IG3 of Appendix E for AASB 10.  The nature of 'returns', as another example, is also addressed in the implementation guidance.  The Board believes the explanations provided will assist a not-for-profit entity to better relate to and apply the requirements of AASB 10.

Implementation guidance on control
BC14 In developing the implementation guidance, including some comprehensive examples, the Board sought to address the implementation issues that were identified in the research referred to in paragraph BC3 on the application of the notion of control by not-for-profit entities in the private and public sectors.  For example, the guidance addresses rights arising from statutory arrangements (paragraphs IG6–IG7), economic dependence (paragraphs IG11–IG12), regulatory powers (paragraphs IG16–IG17), indirect returns (or benefits) to not-for-profit entities and congruent objectives (paragraphs IG18–IG20), and delegated power (paragraphs IG21–IG24).
BC15 The Board did not include implementation guidance in respect of some topics covered by AASB 10 due to the Board's assessment that the issues arise similarly for both for-profit entities and not-for-profit entities.  For example, the requirements regarding de facto agents and control of specified assets raise issues in practice for any entity, not just not-for-profit entities.

Examples
BC16 To illustrate the requirements of AASB 10, the implementation guidance includes examples within guidance paragraphs as well as five discrete, comprehensive examples.  The examples refer to particular types of not-for-profit entities, some in the private sector and others in the public sector.  However, the Board intended that the examples apply by analogy to other types of not-for-profit entities and similar circumstances as relevant, rather than being limited to the specific cases presented.
BC17 The comprehensive examples emphasise a principles-based approach, which requires an analysis of the relevant activities of the investee and of the substantive rights of various investors in considering whether the investor has power (as that term is used in AASB 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