Under IFRS, SPEs are consolidated when evidence indicates that the reporting company controls the SPE. Control is presumed if which of the following conditions exist?

1. The reporting entity performs activities on behalf of the SPE.
2. The SPE has decision-making powers over the activities of the reporting entity.
3. The reporting company has exposure, or rights, to variable returns from its involvement with the investee.
4. The reporting company has the ability to use its power over the investee to affect the amount of the firms returns.

Multiple Choice

• III and IV only.

• I and II only.

• I, II, and III only.

• I, II, III, and IV.