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Does IFRS 10 on Consolidated Financial Statements Abandon Accepted Economic Principles?
Author(s) -
BenShahar Danny,
Sulganik Eyal,
Tsang Desmond
Publication year - 2016
Publication title -
australian accounting review
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.551
H-Index - 36
eISSN - 1835-2561
pISSN - 1035-6908
DOI - 10.1111/auar.12135
Subject(s) - accounting , balance sheet , business , index (typography) , financial crisis , economics , actuarial science , finance , macroeconomics , computer science , world wide web
The 2007 global financial crisis revealed a deficiency in the financial reporting of off‐balance‐sheet vehicles. To better reflect risks associated with such items, International Financial Reporting Standard (IFRS) 10 provided new principles for determining an investor's control of an investee for the purpose of preparing consolidated financial statements. We show that an applicative example appearing under the new guidelines contradicts the conclusion drawn from widely accepted power indices: the Shapley‐Shubik value and the Banzhaf index. Our study adds to the literature aiming to incorporate methodological economic thought into accounting principles.