Methodology for assessing control in the formation of financial statements of a consolidated business

Abstract

In order to develop the Russian consolidated statements, adapted to the new requirements of the international standard IFRS 10, the authors have conducted a study of its main requirements in relation to the assessment of control in the preparation of the financial statements of the consolidated business. Through the use of a methodology for testing investors for control over an investment object, the authors have developed a flowchart aimed at identifying the main criteria for control assessment. The testing performed is to help one choose the right solution for composing financial reports and either generate a consolidated company report controlled by the parent company, or compile reports using the equity method and so on. The research results can be used in the transformation of statements, as well as in the construction of consolidated financial statements generated in Russia in accordance with the requirements of IFRS.