BC60 The definition of control in IFRS 10 uses the concept of returns in two ways.

BC61 In order to have power over an investee an investor must have the current ability to direct the relevant activities, ie the activities that significantly affect the investee's returns. The link to returns was included in the first element of control in order to clarify that having the current ability to direct inconsequential activities is not relevant to the assessment of power and control (see paragraph BC58).

BC62 The second element of control requires the investor's involvement with the investee to provide the investor with rights, or exposure, to variable returns. This retains the concept that control conveys the rights to returns from an investee. To have control an investor must have power over the investee, exposure or rights to returns from its involvement with the investee and the ability to use its power to affect its own returns. Control is not a synonym of power, because equating power and control would result in incorrect conclusions in situations when an agent acts on behalf of others. ED 10 used the term 'returns' rather than 'benefits' because 'benefits' are often interpreted as implying only positive returns.