A transfer of assets (net assets) or an exchange of equity interests among entities (two entities or more, one being a parent and the others subsidiaries) under the parent’s control. In this specific case, control is established through a majority voting interest, as well as variable interests and contractual arrangements. The existence and extent of common control is determined based on management’s judgment.

The group of subsidiaries controlled by the parent is known as the common control group. Such a designation entails accounting for transactions between two entities or more that are ultimately controlled by the same party (parties). For factual or potential consolidation, subsidiaries, if consolidated financial statements were required to be prepared by the parent or controlling party, will be treated as under common control.