Paragraph 9 of AASB 12/IFRS 12 Disclosure of Interests in Other Entities provides the following examples of situations where it is necessary to disclose significant judgements and assumptions in relation to subsidiaries
A) where an entity does not control another entity but it holds more than half of the voting rights in the other entity.
B) where an entity controls another entity but it holds less than half of the voting rights of the other entity.
C) where an entity is an agent or a principal.
D) all of the options are correct.

Question

Quizplus · Accepted Answer

All of the options are correct. Significant judgements and assumptions must be disclosed in situations where an entity holds more than half of the voting rights in another entity but does not control it, where an entity controls another entity but holds less than half of the voting rights, and where an entity is acting as an agent or principal. This ensures that users of the financial statements are aware of the potential impact on the financial position and performance of the reporting entity.