Alpha Co owns 40% of the voting shares of Beta Co. Alpha Co also has the contractual right to appoint 4 of the 5 directors on Beta Co's board. How should Alpha Co account for its investment in Beta Co in its consolidated financial statements?

According to IFRS 10 Consolidated Financial Statements, an investor controls an investee when it is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee. The right to appoint the majority of the board of directors gives Alpha Co power over Beta Co, meaning Beta Co is a subsidiary and must be fully consolidated, even though Alpha owns less than 50% of the shares.