SIC-12
Historical
Consolidation–Special Purpose Entities
Addressed when a sponsor should consolidate a special purpose entity without majority voting rights, using substance-based control indicators. Superseded in 2013 by IFRS 10.
Historical Reference
SIC-12 was superseded in May 2011 when the IASB issued IFRS 10 Consolidated Financial Statements, which introduced a single unified control model for all investees and replaced the substance-based indicators approach of SIC-12.
This page is retained for historical and comparative reference. Entities should refer to the current standard that superseded this interpretation for authoritative guidance.
Current Standard
IFRS 10 Consolidated Financial Statements 1
What SIC-12 Addressed (Historical)
What SIC-12 addressed
SIC-12 addressed when a sponsor should consolidate a special purpose entity (SPE) even though it did not hold a majority of the voting rights. It provided substance-based control indicators to determine whether the sponsor had the power to govern the financial and operating policies of the SPE.
2
The Conclusion It Reached (Historical)
The conclusion it reached
SIC-12 concluded that an SPE should be consolidated when the substance of the relationship indicated that the sponsor controlled the SPE. This was assessed using facts and circumstances including power over the majority of the SPE's activities, rights to obtain the majority of the SPE's benefits, and rights to retain the majority of the residual interests in the SPE.
3
Where This Guidance Lives Today
Where this guidance lives today
Superseded byIFRS 10 Consolidated Financial Statements
Why withdrawnIFRS 10 introduced a single unified control model for all investees
Current statusSuperseded
4
Glossary
Special purpose entity
An entity created for a specific and narrow purpose, often with limited operating flexibility, whose business activities are predetermined by the sponsor.
Control indicators
Facts and circumstances assessed under SIC-12 to determine whether an entity controls an SPE, including power over activities, rights to benefits, and rights to residual interests.
Financial statement key
BS Balance sheet
IS Income statement
SE Statement of changes in equity
OCI Other comprehensive income
SCF Statement of cash flows
History & Development
Jan-1998
In January 1998 the Standing Interpretations Committee issued SIC-12 Consolidation–Special Purpose Entities.
Apr-2001
In April 2001 the International Accounting Standards Board adopted SIC-12.
Minor consequential amendment to SIC-12
May-2011
In May 2011 the Board issued IFRS 10 Consolidated Financial Statements which superseded SIC-12.
Superseded by IFRS 10 (effective 2013)