Document ID: chunk:federal_register_of_legislation:F2025C00172:body:0:p9
Version: federal_register_of_legislation:F2025C00172
Segment Type: other
Provision Reference: 
Character Range: 22134–25111

Equity in a subsidiary not attributable, directly or indirectly, to a parent.
parent                             An entity that controls one or more entities.
power                              Existing rights that give the current ability to direct the relevant activities.
protective rights                  Rights designed to protect the interest of the party holding those rights without giving that party power over the entity to which those rights relate.
relevant activities                For the purpose of this Standard, relevant activities are activities of the investee that significantly affect the investee's returns.
removal rights                     Rights to deprive the decision maker of its decision-making authority.
subsidiary                         An entity that is controlled by another entity.

The following terms are defined in AASB 11, AASB 12 Disclosure of Interests in Other Entities, AASB 128 or AASB 124 Related Party Disclosures and are used in this Standard with the meanings specified in those Standards:
• associate
• interest in another entity
• joint venture
• key management personnel
• related party
• significant influence.

Appendix B
Application guidance
This appendix is an integral part of the Standard. It describes the application of paragraphs 1–33 and has the same authority as the other parts of the Standard.
B1 The examples in this appendix portray hypothetical situations. Although some aspects of the examples may be present in actual fact patterns, all facts and circumstances of a particular fact pattern would need to be evaluated when applying AASB 10.

Assessing control
B2 To determine whether it controls an investee an investor shall assess whether it has all the following:
(a) power over the investee;
(b) exposure, or rights, to variable returns from its involvement with the investee; and
(c) the ability to use its power over the investee to affect the amount of the investor's returns.
B3 Consideration of the following factors may assist in making that determination:
(a) the purpose and design of the investee (see paragraphs B5–B8);
(b) what the relevant activities are and how decisions about those activities are made (see paragraphs B11–B13);
(c) whether the rights of the investor give it the current ability to direct the relevant activities (see paragraphs B14–B54);
(d) whether the investor is exposed, or has rights, to variable returns from its involvement with the investee (see paragraphs B55–B57); and
(e) whether the investor has the ability to use its power over the investee to affect the amount of the investor's returns (see paragraphs B58–B72).
B4 When assessing control of an investee, an investor shall consider the nature of its relationship with other parties (see paragraphs B73–B75).

Purpose and design of an investee
B5 When assessing control of an investee, an investor shall consider the purpose and design of the investee in order to identify the relevant activities, how