Corporate Accounting Report: NAGIL, AASB 10, and Consolidation

This report provides an analysis of the applicability of Australian Accounting Standards Board 10 (AASB 10) in corporate accounting, particularly focusing on the consolidation of financial statements. The report offers advice to Billy Handy, the finance director of Northern Australia Global Investment Ltd (NAGIL), regarding the consolidation of investments, addressing various scenarios and interpretations of AASB 10. It examines control, non-controlling interests, and the powers of parent companies over subsidiaries, including situations where NAGIL holds a majority share but does not directly manage the subsidiary. The report also explores contractual arrangements and voting rights, determining whether NAGIL has the power to direct relevant activities and influence the returns of its investees. Furthermore, the report considers the implications of remuneration and decision-making power in determining control. The conclusion emphasizes the importance of including investments in the consolidated financial report, providing a comprehensive understanding of AASB 10's application in different corporate scenarios.

Running head: CORPORATE ACCOUNTING
CORPORATE ACCOUNTING
Name of the Student:
Name of the University:
Author Note:

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Table of Contents
Introduction......................................................................................................................................3
Discussion:.......................................................................................................................................3
Part A...........................................................................................................................................3
Part B...........................................................................................................................................3
Part C...........................................................................................................................................4
Part D...........................................................................................................................................5
Conclusion:......................................................................................................................................6
Reference:........................................................................................................................................6

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Executive Summary:
The aim of the project is to evaluate and scrutinize of Australian Accounting Standard
Boards 10 applicability. Evaluation of corporate risk laterally with monetary risk of the company
is the initial stages that is involves in the process of audit. In this project, the report advises Bill
to control the needs of AASB 10. The business faintness in numerous financial records and
explanations for reconsideration was given in the report.

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Introduction
The meaning of control provides comprehensive supervision so that a solitary regulator
exemplary can be practically applies to all entities. The project was urbanized partially to report
apparent discrepancies between IAS 27 and SIC 12, and to boost junction by way of US GAAP.
The report gives advice to Billy Handy, the finance director of Northern Australia Global
Investment Ltd (NAGIL), for consolidating his investments. (AASB and C.A.S. 2014).
Discussion:
Part A
In the Para 4 of AASB 10, NAGIL is holding 70% of the shares of SL. Ltd. It is not
tangled in the administration of SL, non-controlling interest appoints the director for SL. Control
is not based upon actual control but it is based on capacity. NAGIL is opened to variety of
returns such as dividends that is earned through the ownership of shares, through the ownership
of shares, it has powers over investees, and it has the capacity to change the returns as it has the
right to be involve in the management according to its wish through the superior voting rights.
( Lyandres and Zhdanov 2014).
NAGIL is the parent company and it should prepare consolidated financial statement as
per AASB10.
Part B
The control exists in the hands of VBCL. In AASB10, paragraph B40 it is specified
under rights from supplementary contractual arrangements that it provides the investor a right for
show the way for the activities that are applicable as it has rights quantified in the contract,

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which is sufficient to straight the activities related to intended and maneuvers of the company.
Therefore, if there is no other right is present pecuniary necessity of an investee on the investor
concerning relationship on a supplier and major clients does not primary to the investor having
control over the investee. SL will not be a subsidiary of NAGIL because the bank is not visible
to variety of returns from the participation with SL. Revenue earned by SL. does not affect the
interest expenditures. It cannot use its power over SL to change the figures of yields, as the
yields are fixed interest outflows.
Some of the relevant actions over which a parent should have power include
determination of funding structure, obtaining funds, processing , researching and developing of
new products, disposing, selecting and acquiring of assets, purchasing and selling of services and
goods.
Part C
In AASB 10, para 39 it was stated that the contractual agreement held between SPL and
NAGIL gives the sufficient right to exercise its voting power. Even if the agreement do not
provide the sufficient power to direct, other vote holders that they enable others about the terms
of voting to reach out to a decision about the activities those are relevant.
In para B40, it states that the right of voting with the right of other decision-making gives
SPL and NAGIL the power to direct the activities those are relevant. This right gives to direct the
activities that are related to operations and monetary as this prominently affects the investee`s
return. The power lies in the hands of NAGIL and SPL regarding MSCL. Ltd.
From Para`s B68 to B70 states regarding the payment of remuneration. The highest the
scale of, and inconsistency associated with, the result maker’s remuneration comparative to the

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returns predictable from the events of the investee, the additional possible the judgment maker is
a main. In defining whether it is a major or a mediator the conclusion maker shall also deliberate
whether the subsequent situations exist: that the remuneration of the judgment maker is
corresponding with the facilities provided. The remuneration contract includes only rapports,
situations or quantities that are usually present in preparations for similar amenities and side-by-
side of assistances discussed on an arm’s length basis. (GUPTA 2014).
Part D
In AASB 10, power is termed as the existing right given for directing the relevant activities
through current ability. Relevant activities are termed as those activities of the investee that
expressively affects the investee`s return. If the actions of Tom and Marjory Legless both affects
the return of investee`s then it is essential to determine the actions such as development and
obtaining of standing orders approval to supervise he major affected return of the investee. For
determining the reason of affection The elements that determine the margin of profit, value and
proceeds of the investee as well as the value of adventure, revelation to the varieties of return,
designing and fortitude if the investee and the outcome on the investee`s return ensuing from
each investor`s verdict making. (Howieson 2013).
In this particular situation the investor would contemplate the ambiguity of, and
determination mandatory in obtaining regulatory sanction in view of the investor`s record of
effective evolving and procurement the controlling sanction of journey and which depositor
control the adventure trips once the expansion phase is over.
Bill should show the investments in the consolidated financial statement.

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Conclusion:
In this report applicability of ASSB 10 in different cases of consolidating the financial
statements have been discussed while taking four different situations. The aim of the report is to
advice Bill to include the investments in its consolidated financial report.
Reference:
AASB, C.A.S., 2014. Financial Instruments. Project Summary.
GUPTA, M.S., 2014. External Commercial Borrowing: Quest in India. International Journal of
Multidisciplinary Approach & Studies, 1(4).
Howieson, B., 2013. Defining the Reporting Entity in the Not‐for‐Profit Public Sector:
Implementation Issues Associated with the Control Test. Australian Accounting Review, 23(1),
pp.29-42.
Juhmani, O.I., 2013. Ownership structure and corporate voluntary disclosure: Evidence from
Bahrain. International Journal of Accounting and Financial Reporting, 3(2), pp.133-148.
Minton, B.A., Taillard, J.P. and Williamson, R., 2014. Financial expertise of the board, risk
taking, and performance: Evidence from bank holding companies. Journal of Financial and
Quantitative Analysis, 49(2), pp.351-380.
Müller, V.O., 2014. The impact of IFRS adoption on the quality of consolidated financial
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Pacter, P., 2014. Global accounting standards-From Vision to reality. The CPA Journal, 84(1),
p.6.

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Lyandres, E. and Zhdanov, A., 2014. Convertible debt and investment timing. Journal of
Corporate Finance, 24, pp.21-37.