Extracts from relevant Accounting Standards for Private Enterprises (ASPE)
Section 1582, Business Combinations, paragraph 1582.03; Section 1591, Subsidiaries, paragraphs 1591.03-.07; and Section 1601, Consolidated Financial Statements, paragraphs 1601.03-.04
Section 1582 states that control as part of a business combination is an entity’s continuing power to determine its strategic, investing, and financing policies without the co-operation of others. Section 1591 furthers that point to state that a parent’s control over a subsidiary and its exposure to risks and rewards associated with the subsidiary’s resources, though typically acquired through equity interest in the subsidiary, such as acquisition of common shares (i.e., voting rights), may be acquired by other means such as contractual arrangements or other combination.
For example, the consolidation of entities and definition of “control” from an accounting perspective may or may not consistently line up with climate-related disclosure requirements. However, it would be prudent to ensure that disclosures related to emissions, or other climate-related matters, by a consolidated entity (i.e., both parent and subsidiary) are available to the users of the financial statements.
When preparing consolidated or combined financial statements under Section 1601, it is important to consider the relationship between the climate-related matters presented and/or disclosed based on guidance from other Sections in Part II of the Handbook and how they may affect the consolidated financial statements.
