IND AS 110

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pardeep jindal (Querist)
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02 September 2024 company "A" holds 33% share capital of "B" . Also directors of "B" are promoter of co. "A" and "B" .
do IND AS 110 applicable on co. "A".

please suggest

Aashok Kumar Sharma online

Aashok Kumar Sharma

(Expert)
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12 August 2025 What is Ind AS 110 About?
Ind AS 110 deals with Consolidated Financial Statements and control assessment.
It applies when an entity (the parent) controls one or more other entities (subsidiaries).
Control is defined as the power to govern the financial and operating policies to obtain benefits.
Does Company "A" control Company "B"?
Company A holds 33% shareholding in B (less than 50%).
Directors of B are also promoters of A and B, so there is common management.
But shareholding alone (33%) does not necessarily mean control.
Control can also arise via:
Voting rights (actual power to direct)
Board control (appointing majority directors)
Contractual arrangements or dominant influence
You need to assess if A has power over B’s relevant activities, exposure to variable returns, and the ability to use power to affect returns.
Likely Scenario:
If Company A cannot unilaterally control B’s decisions or appoint majority directors, then no control.
Having common promoters/directors may indicate influence but not necessarily control.
33% shareholding usually implies significant influence, making B an associate, not a subsidiary.
Application of Ind AS 110:
If control exists → Ind AS 110 applies → Company A must consolidate B.
If only significant influence (but no control) → Ind AS 28 applies → Company A accounts for B as associate using the equity method, not consolidation.

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