### Summary of IFRS 10: Consolidated Financial Statements

**Objective:**
IFRS 10 establishes principles for the presentation and preparation of consolidated financial
statements when an entity controls one or more other entities.

**Key Points:**

1. **Control Definition:**
- Control is defined as having power over an investee, exposure or rights to variable returns
from involvement with the investee, and the ability to use power to affect the amount of those
returns.
- An investor controls an investee if and only if the investor has all of the following
elements:
1. Power over the investee (i.e., the investor has existing rights that give it the current
ability to direct the relevant activities of the investee).
2. Exposure, or rights, to variable returns from its involvement with the investee.
3. The ability to use its power over the investee to affect the amount of the investor's
returns.

2. **Principles of Consolidation:**
- A parent must consolidate its subsidiaries from the date it gains control until the date when
it loses control.
- Non-controlling interests (NCI) are presented in the consolidated statement of financial
position within equity, separately from the equity of the owners of the parent.
- Total comprehensive income is attributed to the owners of the parent and to the NCI even
if this results in the NCI having a deficit balance.

3. **Investment Entities:**
- Investment entities are exempt from consolidating their subsidiaries. Instead, they
measure those subsidiaries at fair value through profit or loss.
- An investment entity is an entity that:
 1. Obtains funds from one or more investors for the purpose of providing them with
investment management services.
2. Commits to its investors that its business purpose is to invest funds solely for returns
from capital appreciation, investment income, or both.
3. Measures and evaluates the performance of substantially all of its investments on a fair
value basis.

4. **Loss of Control:**
- When a parent loses control of a subsidiary, it derecognizes the assets and liabilities of the
subsidiary and any related NCI.
- Any investment retained in the former subsidiary is recognized at its fair value at the date
when control is lost, and this fair value is considered in the calculation of the gain or loss
upon disposal.

5. **Accounting Requirements:**
- The consolidation process involves combining the financial statements of the parent and
its subsidiaries line by line by adding together like items of assets, liabilities, equity, income,
and expenses.
- Intra-group balances, transactions, income, and expenses are eliminated in full.
- Uniform accounting policies are applied for like transactions and other events in similar
circumstances.

**Implementation and Compliance:**

- Entities are required to regularly reassess whether they control an investee, especially if
there are changes in one or more of the three elements of control.
- Disclosures are required to help users of financial statements understand the composition of
the group and the interests that non-controlling interests have in the group’s activities and
cash flows.

**Conclusion:**
IFRS 10 provides a single consolidation model that identifies control as the basis for
consolidation for all types of entities. This standard ensures that financial statements present a
parent and its subsidiaries as a single economic entity, offering a clear and consistent
approach to determining control and consolidating subsidiaries.