CERTYNEX IFRS ACADEMY

A colleague writes: "Orme SA controls Hêtre SA alone, but other shareholders also hold voting rights; Orme therefore applies IFRS 11 and treats Hêtre as joint control." Case convention: Orme meets the three elements of control. What is the error?

It overlooks that joint control exists if each party holds exactly the same interest in the entity's capital.

It confuses control and significant influence: Orme has significant influence over Hêtre, which rules out any joint control exercised with other parties.

It overlooks that joint control requires the unanimous consent of the parties, and that a party that controls the entity is outside the scope of IFRS 11.

It applies IFRS 11 to a listed entity, whereas that standard applies only to unlisted entities.