CASE STUDY NATURE OF CONTROL The following comment was received by the IASB on 6 April 2009 from the Swedish Financial Reporting Board in response to the issue of Exposure Draft (ED) 10 Consolidated Financial Statements (the predecessor of IFRS 10). We agree that consolidated financial statements would be improved, if they include entities under ‘de facto’ control. However, the problem is to establish which entities are really under ‘de facto’ control. There are situations where it is very clear that the dominant shareholder de facto controls another entity, but there are also lots of situations, where it is not clear that the dominant shareholder de facto controls the other entity. We suggest that the requirement for consolidation based on ‘de facto’ control is restricted to situations, where it is beyond reasonable doubt that control really exists. Required Discuss whether AASB 10/IFRS 10 in its current form has the problem raised by the Swedish Financial Reporting Board. CASE STUDY