A critique of international Accounting standard No.27

Control for consolidation can be defined as authority of the investing entity over the financial and operating decisions of the voting entities. Control in consolidated entities is more aligned to majority control rights rather than majority financial ownership. Control can therefore be exercised in the absence of a parentís 50% ownership, when the power to appoint or remove a part of the board of directors. The examination of the International Accounting Standard No. 27 (IAS 27) has shown that investment efficiency has been achieved since itsí adoption in various states (Hsu et al, 2015: 1).

The quest for establishing the significance of IAS 27 in the recent management of investment activities, has led to findings. The paper focused on establishing the coherence of IAS 27 while comparing it with methods that have been used before such as the equity method. Some firms are still compelled to use the equity method for how it covers cross-sub-sidization within the company along wit...