In today’s dynamic business environment, the assessment of control under Ind AS 110, Consolidated Financial Statements, is a foundational step in accounting for business combination transactions. Determining whether an investor has control over an investee is not merely a procedural requirement - it is central to ensuring that financial statements accurately reflect the economic realities of complex group structures. Ind AS 110 emphasises that control may also arise from substantive rights, which confer the practical ability to direct relevant activities. This principle ensures that entities consolidate only those businesses over which they have genuine power, thereby enhancing the transparency and reliability of financial reporting in business combinations. This edition of the Accounting and Auditing Update (AAU) features an article that explores the principles governing substantive potential voting rights under Ind AS 110 and highlights key considerations through an example adapted from decisions published by the European Securities and Markets Authority (ESMA).
The increasing complexity of corporate structures and global operations has elevated the importance of operating segment disclosures in financial reporting. Ind AS 108, Operating Segments requires companies to present segment information based on how management views the various components/parts of the business thereby providing stakeholders with deeper insights into the company’s business activities, risks and profitability. This publication features an article that highlights key trends in segment disclosures among the top listed companies on the National Stock Exchange (NSE), by market capitalisation.
As always, we have included a digest of recent regulatory updates in India and internationally.
We would be delighted to receive feedback/suggestions from you on the topics we should cover in the forthcoming editions of AAU.
For more information on this update, please write to aaupdate@kpmg.com.
