Ind AS 110
Active
Consolidated Financial Statements
Establishes principles for presenting consolidated financial statements when an entity controls one or more other entities, substantially converged with IFRS 10.
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Conceptual Framework Linkage
Identical control philosophy to IFRS 10
Ind AS 110 applies the IDENTICAL single control model as IFRS 10 – consolidation follows genuine POWER, exposure to VARIABLE RETURNS, and the ABILITY to use power to affect those returns, replacing any purely voting-percentage-based approach with a substance-based test.
HOW IND AS 110 MAPS TO THE FRAMEWORK
Substance over form – identical to IFRS 10 Faithful representation – consolidating only what is genuinely controlled – identical to IFRS 10 Interaction with India's fund management sector – Indian mutual funds/AIFs are ALSO separately regulated by SEBI, whose own regulations govern fund structuring; Ind AS 110's investment entities exception (Section 7) must be applied CONSISTENTLY with this parallel SEBI framework
Ind AS 110 introduced NO substantive change to the control definition itself relative to IFRS 10 – its practical application in India is most distinctive for asset managers and NBFCs managing pooled investment vehicles.
The three-element control test – identical to IFRS 10
Control = Power + Exposure to variable returns + Ability to use power to affect returns
ALL three elements must be present simultaneously – IDENTICAL requirement to IFRS 10.
2
Scope & Applicability
What Ind AS 110 covers
Ind AS 110 establishes principles for presenting/preparing consolidated financial statements when an entity controls one or more other entities – IDENTICAL scope to IFRS 10.
Applies to Indian parent companies preparing consolidated financial statements under the Companies Act, 2013 and Ind AS.
Key definitions you must know
Control of an investee
IDENTICAL definition to IFRS 10.
AIF (Alternative Investment Fund)
A SEBI-regulated Indian pooled investment vehicle (e.g. private equity, venture capital, hedge funds), relevant to the investment entities exception analysis.
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The Control Model – Three Elements
Identical continuous reassessment requirement to IFRS 10
An investor reassesses control whenever facts/circumstances indicate changes to power, returns, or linkage – IDENTICAL to IFRS 10, with no Indian-specific modification.
4
Power Over the Investee
Identical to IFRS 10
Power arises from rights – voting, appointment/removal of key management, contractual arrangements – with substantive potential voting rights considered, IDENTICAL to IFRS 10.
Example 1: De facto control at an Indian listed company
An Indian promoter holds 38% of a listed company's shares; the remaining 62% is dispersed among thousands of small retail shareholders, with historical AGM attendance rarely exceeding 25% of total voting rights.
The 38% stake likely confers de facto control given extreme dispersion and low turnout – IDENTICAL analysis to how IFRS 10 would assess the same facts globally.
5
Exposure to Variable Returns
Identical broad concept to IFRS 10
Returns can be positive, negative, or both, including dividends, fees, residual interests – IDENTICAL to IFRS 10, with the same principal/agent nuance for fund managers (Section 6).
6
Linkage Between Power and Returns – Principal vs Agent
Identical decision-maker analysis to IFRS 10
The principal-vs-agent test (scope of decision-making authority, other parties' rights, remuneration, exposure to variability) is IDENTICAL to IFRS 10.
Example 2: An Indian AIF manager as agent
An Indian AIF's investment manager earns a market-standard 2% management fee plus a 20% performance fee (carried interest), typical for Indian private equity/venture funds. Investors hold substantive rights to remove the manager via majority vote, per the fund's constitutional documents (aligned with SEBI AIF Regulations).
The manager is likely acting as an AGENT – market-based remuneration and substantive investor removal rights – and does NOT consolidate the fund, an IDENTICAL conclusion to how IFRS 10 would assess an equivalent global private equity fund structure.
7
Investment Entities Exception – Indian AIF/Mutual Fund Context
A genuinely important interaction point
Ind AS 110's investment entities exception (fair value through profit or loss, rather than consolidation) is available on the SAME criteria as IFRS 10 (funds obtained from investors, exit strategy commitment, fair-value-based performance evaluation) – but its PRACTICAL application must be considered ALONGSIDE SEBI's Mutual Fund Regulations and AIF Regulations, which impose their OWN structural and reporting requirements on Indian pooled investment vehicles. This is a REGULATORY LAYER interaction, similar in spirit to IRDAI's role for insurers and RBI's for banks, rather than a substantive accounting divergence from IFRS 10.
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Loss of Control
Identical to IFRS 10
Derecognition of assets/liabilities/NCI, recognition of consideration received, and fair value remeasurement of any retained interest – IDENTICAL to IFRS 10.
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Disclosure Requirements
Identical disclosure requirements to IFRS 10
Significant judgements in determining control Group composition, NCI interests Restrictions on accessing group assets
10
Critical Judgments & Estimates
Where management judgement matters most
SIGNIFICANT JUDGEMENTS
De facto control in dispersed Indian listed company shareholdings Principal vs agent for Indian fund managers Investment entity qualification alongside SEBI AIF/Mutual Fund Regulations
SIGNIFICANT ESTIMATES
Fair value of a retained interest on loss of control
For Indian NBFCs sponsoring securitisation SPVs, the control assessment (particularly the "power" and "linkage" elements) requires careful analysis, similar to structured entity assessments globally under IFRS 10.
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Ind AS 110 vs IFRS 10 – Full Comparison
Comprehensive comparison table
FeatureIFRS 10Ind AS 110
Control modelPower + returns + linkageIDENTICAL
Investment entities exceptionAvailable per specific criteriaIDENTICAL criteria, applied alongside SEBI's separate Mutual Fund/AIF Regulations for Indian pooled vehicles
NBFC consolidationNo specific global equivalent regulatory overlayRBI's separate NBFC regulatory framework may impose additional group-structure reporting requirements alongside Ind AS 110
Ind AS 110 is essentially IDENTICAL to IFRS 10 in substance – the meaningful Indian context is the interaction with SEBI/RBI's separate regulatory frameworks for funds and NBFCs, not any divergence in the control definition itself.
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Statement Mapping
Comprehensive event-to-statement mapping table
Event / transactionStatement(s) affectedNotes
Line-by-line combinationBalance SheetIdentical to IFRS 10
NCI share of profitP&L EquityIdentical to IFRS 10
Loss of control remeasurementP&L Balance SheetIdentical to IFRS 10
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Related Standards
Cross-reference map
StandardConnection
IFRS 10The global counterpart standard, near-identically converged
Ind AS 103Applied at the point control is obtained
SEBI AIF/Mutual Fund RegulationsGoverns the legal structuring of Indian pooled investment vehicles relevant to the investment entities exception
Quick-reference glossary
AIF
Alternative Investment Fund – a SEBI-regulated Indian pooled investment vehicle.
Carried interest
A performance-based fee common in Indian private equity/VC fund structures, relevant to principal vs agent analysis.
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Glossary
Control of an investee
IDENTICAL definition to IFRS 10 – power over the investee, exposure to variable returns, and ability to use power to affect returns.
AIF (Alternative Investment Fund)
A SEBI-regulated Indian pooled investment vehicle (e.g. private equity, venture capital, hedge funds), relevant to the investment entities exception analysis.
De facto control
Control arising from substantive potential voting rights and dispersed shareholding patterns, rather than a majority voting stake.
Principal vs agent
The assessment of whether a decision-maker is acting as principal (consolidates) or agent (does not consolidate) based on scope of authority, remuneration, and exposure to variability.
Financial statement key
BS Balance sheet
IS Income statement
SE Statement of changes in equity
OCI Other comprehensive income
SCF Statement of cash flows