Control-based consolidation requires parents to combine subsidiaries, reassess control, and apply fair-value treatment to qualifying investment entities.

Consolidated financial statements are required when an investor controls a subsidiary through power over relevant activities, exposure or rights to variable returns, and the ability to use power to affect those returns. Consolidation combines group financial information using uniform accounting policies and eliminates intragroup balances and transactions. Non-controlling interests are separately presented within equity, while ownership changes without loss of control are equity transactions. Investment entities generally measure controlled subsidiaries at fair value through profit or loss, but must consolidate non-investment-entity subsidiaries principally providing investment-related services.

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