Exposure to variable returns

Learning objectives

• Identify the possible variable returns (dividends, remuneration, exposure to losses, synergies) of an investor from its involvement with an entity.L1, L2
• Explain that returns can be positive, negative or both.L1

Normative references

• IFRS 10 §15Variable returns are returns that have the potential to vary as a result of the investee's performance; they can be positive, negative or both.

Original summaries of the paragraphs (reference register), never a quotation of the standard.

3 questions

• The variable returns of an investor in an entity are limited to the dividends the entity pays to it.L1
• Which statements about variable returns are correct? More than one answer is possible.L1
• Saule SA holds 15% of the capital of Tilleul SA. It receives a dividend whose amount depends on Tilleul's profit, and it would suffer a loss on its holding if Tilleul recorded losses (case data). What can be said about Saule's returns in Tilleul?L2