IFRS 10, Post-Implementation Review & the recurring matter of quantitative thresholds

Abstract

Consolidated financial statements have become a fundamental economic document following the increasing development of business groups and globalization. With the temporal evolution of the relative principles and, above all, with the transition from IAS 27 to IFRS 10, numerous changes in the preparation of these documents have been observed by preparers, who to date still encounter some difficulties and acknowledge that applying the principles in IFRS 10 often involves a high degree of judgment, which in turn leads to diversity in practice. As part of the Board's due process, Post-Implementation Reviews (PIRs) help assess the effects of requirements on users, preparers and auditors of financial statements. In the first phase, the Board identified and assessed the matters to be examined further in a Request for information; the second part consists of collecting feedbacks and responses and summarizing the findings in order to, if necessary, state what will be the next steps to follow and solve potential issues detected when collecting the responses to the Request. The purpose of this thesis is to briefly present the main aspects of IFRS 10 and, most importantly, to simulate or, better, anticipate the second part of the IFRS 10 PIR, by summarizing and analyzing the answers provided by the respondents and eventually commenting on the main facts and issues emerged - in particular whether setting quantitative thresholds is or not the most suitable way to determine control.