Abstract
Consolidation is the cornerstone of useful financial statements. Consolidated financial statements depict the financial benefits as well the financial risks associated with group financial statements. Consolidated financial statements are prepared where the holding company controls one or more companies. Yet, the definition of control has been subject to debate due to ambiguities contained in the two preceding standards addressing the definition of control. This definition was subsequently revised by the International Accounting Standards Board (IASB) and is expected to bring about more consistency in identifying control. The aim of this dissertation is to evaluate the successful application of the new definition of control as applied by listed companies in the South African context. The dissertation thus considers the consistent identification of subsidiaries based on the new definition of control issued by the IASB. The research methodology is an empirical analysis of listed financial statements that have adopted the new consolidation standards and is a post-implementation review of the standard by the listed entities. The results indicate that the revised definition of control provides greater clarity in identifying subsidiaries controlled by holding companies in South Africa. The scope of the study is limited to listed companies in South Africa and the study is focused only on the post-implementation review of IFRS 10. Recommendations are outlined for further research opportunities in light of the limitations of the study; to research the impact of the implementation of IFRS 10 to smaller companies and to investigate the impact of the adoption of IFRS 11.
M.Com. (International Accounting)