Objective
Requires disclosures that help users evaluate the nature of, and risks from, an entity's interests in subsidiaries, joint arrangements, associates and unconsolidated structured entities, and their financial effects.
Scope
- Entities with interests in subsidiaries, joint arrangements, associates or unconsolidated structured entities.
- Generally does not apply to post-employment benefit plans or an entity's separate financial statements (with limited exceptions).
Key definitions
- Structured entity
- An entity designed so that voting or similar rights are not the dominant factor in deciding who controls it, e.g. where relevant activities are directed by contract.
- Interest in another entity
- Contractual and non-contractual involvement that exposes an entity to variability of returns from the other entity's performance.
Recognition & measurement
Key disclosure areas
- Significant judgements and assumptions in deciding whether the entity has control, joint control or significant influence, and the type of joint arrangement.
- Subsidiaries: group composition, NCI share in activities and cash flows (with summarised information for material NCI), significant restrictions, and effects of changes in ownership.
- Joint arrangements and associates: nature, extent and financial effects, including summarised financial information for material ones, and related risks and commitments.
- Unconsolidated structured entities: nature and extent of interests and the risks they expose the entity to.
Key disclosures
- IFRS 12 is itself a disclosure standard; the items above are its main requirements.
Common exam traps
- IFRS 12 has no recognition or measurement rules — it only adds disclosures to IFRS 10, IFRS 11 and IAS 28.
Practise MCQs on this standard
Test your understanding of IFRS 12 with free chapter-wise MCQs and explanations in these question banks.
CAF-6 Corporate ReportingICAP CAFACCA FR Financial ReportingACCACA Inter P1 Advanced AccountingICAI CA Intermediate
ICAI CA Intermediate examines Indian Accounting Standards, which are based on but can differ from IFRS. Check your syllabus.