IFRS 10Chapter 3Lesson 3
Power without a majority: de facto control, potential rights, structured entities
Step 1 of 4Learning objectives
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Power can exist without a majority of voting rights, through the practical ability to direct, substantive potential voting rights or contractual arrangements in a structured entity; these situations call for judgment.
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Learning objectives
- Explain that an investor without a majority can have power if it has the practical ability to direct.
- Assess the practical ability from size, dispersion and past voting.
- Justify that a potential voting right is or is not substantive.
- Identify a structured entity and analyse the purpose, design and involvement of the investor.