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(144)-IMPORTANT DEFINITIONS FOR GROUP ACCOUNTING

Saturday, April 3, 2010

Important Definitions for Group Accounting

Control

Control is the ability of an undertaking to direct the financial and operating policies of another undertaking with a view to gaining economic benefits from its activities.

Interest held on a long term basis


An interest held on a long term basis is an interest which is held other than exclusively with a view to subsequent resale.


Interest held exclusively with a view to subsequent resale


An interest exclusively with a view to subsequent resale is either:

  • An interest for which a purchaser has been identified or is being sought, and which is reasonably expected to be disposed of within approximately one year of its date of acquisition, or
  • An interest that was acquired as a result of the enforcement of a security, unless the interest has become part of the continuing activities of the group or the holder acts as if it intends the interest to become so


Managed on a unified basis


Two or more undertakings are managed on a unified basis if the whole of the operations of the undertakings are integrated and they are managed as a single unit. Unified management does not arise solely because one undertaking manages another.

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