- 3 Marks
FR – Dec 2022 – L2 – Q2d – Structured Entities
Justify whether Wesseh LTD qualifies as a structured entity under IFRS 12.
Question
Under IFRS 12: Disclosure of Interests in Other Entities, a structured entity is defined as one designed so that voting or similar rights are not the dominant factor in deciding who controls the entity.
Wesseh LTD is an entity set up by a sponsoring bank to hold specific mortgages, securitised by that bank. The operation of Wesseh LTD is governed by an operating agreement that sets out the managerial structure and rules of operation.
Required:
Justify whether the above would meet the definition of a structured entity.
Find Related Questions by Tags, levels, etc.
- Tags: Control, Corporate Reporting, Disclosure, IFRS 12, Operating Agreement, Structured Entity
- Level: Level 2
- Topic: Financial Reporting Standards and Their Applications
- Series: Nov 2024
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