AmazonScience/document-haystack

102 – Significant Accounting Policies and Critical 2Accounting Estimates3Accounting Policies 4Consolidation Principles5In accordance with IFRS 10 “Consolidated Financial Statements”, the Group’s consolidated 6financial statements include the financial statements of DWS KGaA and its subsidiaries 7including certain structured entities. 8Subsidiaries are those entities which DWS KGaA directly or indirectly controls. Control over 9an entity is evidenced by the Group’s ability to exercise its power in order to affect any 10variable returns that the Group is exposed to through its involvement with the entity. 11When assessing whether to consolidate an entity, the Group evaluates a range of control 12factors, namely:13— the purpose and design of the entity,14— the relevant activities and how these are determined,15— whether the Group’s rights result in the ability to direct the relevant activities,16— whether the Group has exposure or rights to variable returns,17— whether the Group has the ability to use its power to affect the amount of its returns.18Where voting rights are relevant, the Group is deemed to have control where it holds, directly 19or indirectly, more than half of the voting rights over an entity unless there is evidence that 20another investor has the practical ability to unilaterally direct the relevant activities. Potential 21voting rights that are deemed to be substantive are also considered when assessing control. 22Likewise, the Group also assesses existence of control where it does not control the majority 23of the voting power but has the practical ability to unilaterally direct the relevant activities or 24its exposure to the variability of returns is different from that of other investors. This may arise 25in circumstances where the size and dispersion of holdings of the shareholders give the 26Group the power to direct the activities of the investee. Issuance of a subsidiary’s stock to 27third parties are treated as non-controlling interests. Profit or loss attributable to non-28controlling interests are reported separately in the Consolidated Statement of Income and 29Consolidated Statement of Comprehensive Income.30At the date that control of a subsidiary is lost, the Group 31a) derecognizes the assets (including attributable goodwill) and liabilities of the subsidiary at 32their carrying amounts.33b) derecognizes the carrying amount of any non-controlling interests in the former 34subsidiary.35c) recognizes the fair value of the consideration received and any distribution of the shares 36of the subsidiary.37d) recognizes any investment retained in the former subsidiary at its fair value and 38e) recognizes any resulting difference of the above items as a gain or loss in the income 39statement40Any amounts recognized in prior periods in other comprehensive income in relation to that 41subsidiary would be reclassified to the Consolidated Statement of Income or transferred 42directly to retained earnings if required by other IFRS.43Newly acquired subsidiaries are consolidated using the acquisition method. This method 44requires all of a subsidiary’s and consolidated structured entity's assets and liabilities to be 45recognised at fair value at the acquisition date or at the date on which control is acquired. 46Any difference between the cost and the fair value of the assets and liabilities is recognised 47as goodwill under intangible assets. 48Structured Entities49Structured entities are designed to serve a specific business purpose and voting rights or 50similar rights are not the dominant factor in deciding who controls the entity. This is the case, 51for example, when voting rights only relate to administrative tasks and the relevant activities 52are controlled through contractual agreements. 53Structured entities are consolidated when the substance of the relationship between the 54Group and the structured entities indicates that the structured entities are controlled by the 55Group and the Group is exercising its power as a principal rather than as an agent. In 56assessing whether the Group is an agent or a principal, it considers a number of factors, 57including the scope of its decision-making activities, rights held by other parties and its 58exposure to variable returns including remuneration. 59The Group engages with structured entities mainly in order to carry out its business activities, 60the management of assets on behalf of its clients. In addition, the group invests in structured 61entities for liquidity management purposes. A group entity may act as fund manager or some 62         63To our 64Shareholders65Summarised 66Management Report67Consolidated 68Financial Statements Compensation Report Corporate Govern-69ance Statement70Supplementary 71Information DWS 2023 Annual Report72 73Notes to the Consolidated Financial Statements7478 02 – Significant Accounting Policies and Critical Accounting Estimates