IFRS 10 vs ASC 810: consolidation differences

The same group can consolidate different subsidiaries under IFRS and US GAAP, because the two frameworks define control differently. This guide compares IFRS 10 with ASC 810, explains each difference, and works through an investor with 45% of the votes.

By Muhammad Bilal, Chartered Accountant. Reviewed by Awais Jameel, Chartered Accountant. 3 minute read.

Short answer

IFRS 10 vs ASC 810 differ mainly in how control is assessed. IFRS 10 has a single control model, based on power, exposure to variable returns and the link between them, applied to every investee. ASC 810 has two models: the variable interest entity model, applied first, and the voting interest model, under which control generally means a majority of the votes. The consolidation differences show up in de facto control, potential voting rights, structured entities and investment entities.

At a glance

IFRS model
One control model for all investees
US models
VIE model first, then voting interest
De facto control
Yes (IFRS), not under the US voting model
Potential voting rights
Substantive ones count (IFRS)
Investment entities
Fair value, both
Mechanics
Similar consolidation procedures
IFRS 10 vs ASC 810: consolidation differencesIFRS model: One control model for all investees; US models: VIE model first, then voting interest; De facto control: Yes (IFRS), not under the US voting model; Potential voting rights: Substantive ones count (IFRS); Investment entities: Fair value, both; Mechanics: Similar consolidation procedures.KEY FACTS AT A GLANCEIFRS 10 vs ASC 810: consolidation differencesIFRS modelOne control model for allinvesteesUS modelsVIE model first, thenvoting interestDe facto controlYes (IFRS), not under theUS voting modelPotential voting rightsSubstantive ones count(IFRS)Investment entitiesFair value, bothMechanicsSimilar consolidationproceduresTax BakersIFRS 10 vs ASC 810: consolidation differencesIFRS model: One control model for all investees; US models: VIE model first, then voting interest; De facto control: Yes (IFRS), not under the US voting model; Potential voting rights: Substantive ones count (IFRS); Investment entities: Fair value, both; Mechanics: Similar consolidation procedures.KEY FACTS AT A GLANCEIFRS 10 vs ASC 810: consolidationdifferencesIFRS modelOne control model for all investeesUS modelsVIE model first, then voting interestDe facto controlYes (IFRS), not under the US voting modelPotential voting rightsSubstantive ones count (IFRS)Investment entitiesFair value, bothMechanicsSimilar consolidation proceduresTax Bakers
Key facts at a glance, as set out in this guide.

IFRS 10 vs ASC 810: what are the differences?

IFRS 10 vs ASC 810 at a glanceIFRS 10 vs ASC 810 at a glanceTOPICIFRSUS GAAPSingle control modelRequiredNot usedDe facto controlAllowedNot allowedPotential voting rightsRequiredNot requiredSeparate VIE modelNot usedRequiredNCI within equityRequiredRequired
Different routes to control can lead to different groups.
AreaIFRS 10ASC 810
Control modelsOne model: power, variable returns, linkVIE model (power and economics), then voting interest model
Large minority holdingMay give de facto controlGenerally not control under the voting model
Potential voting rightsConsidered if substantiveGenerally not considered in the voting model
Entities controlled by contractsStructured entities, same control modelVariable interest entities, separate model
Kick-out rights over a decision makerPart of the principal or agent analysisKey to whether limited partnerships are VIEs
Investment entitiesMeasure subsidiaries at fair value through profit or lossInvestment companies under ASC 946 also use fair value
Private company reliefNoneCommon control alternative for VIEs
Non-controlling interest presentationWithin equityWithin equity

An example: 45% of the votes

An investor owns 45% of a listed company. The other 55% is held by thousands of shareholders, none with more than 1%, who have never organised to outvote a large holder. The company is not a variable interest entity.

  • IFRS 10: the investor probably has de facto control, because its holding is large relative to the dispersed others, and consolidates the company.
  • ASC 810: under the voting interest model, a controlling financial interest generally requires more than 50% of the votes, so the investor does not consolidate and accounts for its holding using the equity method.

Revenue, debt and assets of the whole company appear in the IFRS consolidated statements but not in the US ones, which show a single equity-method investment line.

How do structured entities and VIEs compare?

Both frameworks look through contracts to find who really controls entities that are not run by voting rights. US GAAP uses a separate VIE model with detailed criteria and a primary beneficiary test; IFRS applies its single control model, with more judgement. Outcomes are often the same, but the analysis is documented differently. See variable interest entities.

How do investment entities compare?

Under IFRS 10, an investment entity measures its subsidiaries at fair value through profit or loss, but a non-investment entity parent of an investment entity must consolidate everything. Under US GAAP, investment companies within ASC 946 also use fair value, and a non-investment company parent can keep that fair value accounting in its own consolidated statements, a notable difference for groups that own funds.

Why does the difference matter for analysts?

Whether an entity is consolidated changes revenue, debt, leverage ratios and segment information. When comparing an IFRS group with a US peer, analysts check the notes for unconsolidated entities and large equity-method investments that one framework would consolidate and the other would not.

Are the consolidation procedures the same?

Largely: line-by-line combination, elimination of intragroup items, uniform policies, non-controlling interest in equity, and equity transactions for ownership changes without loss of control. See a consolidation example, control under IFRS 10 and ASC 810 explained.

Need help applying the standards?

Our Chartered Accountants help finance teams and students apply IFRS and US GAAP to real transactions.

Book a call Chat on WhatsApp

Questions people ask

What is the difference between IFRS 10 and ASC 810?

IFRS 10 uses one control model for all investees; ASC 810 applies a variable interest entity model first and a voting interest model otherwise.

Does US GAAP recognise de facto control?

Not under the voting interest model, which generally requires a majority of the votes. IFRS 10 recognises de facto control.

Are potential voting rights considered under ASC 810?

Generally not in the voting interest model. IFRS 10 considers substantive potential voting rights.

Are consolidation procedures different under IFRS and US GAAP?

They are very similar: line-by-line combination, intragroup eliminations and non-controlling interest within equity.

Sources

Every fee, date and rule on this page was taken from these official and primary sources.

  1. IFRS Foundation: IFRS 10 Consolidated Financial Statements
  2. FASB Accounting Standards Codification: Topic 810, Consolidation

Rules and fees change. If you are reading this long after October 4, 2026, confirm the figures with the source before you rely on them.

IFRS 10Control: power, returns and the link between themASC 805 and 810ASC 810 consolidation explainedASC 805 and 810Variable interest entities under ASC 810

More in IFRS vs US GAAP

Previous in this topicIFRS 3 vs ASC 805: business combination differencesNext in this topicIAS 37 vs ASC 450: provisions and contingenciesTopicAll 16 guides in IFRS vs US GAAP

This guide is general information. It is not tax or legal advice for your situation.