The Direct Parent is the lowest level legal entity that owns more than 50% and consolidates the child entity's accounts.
The Ultimate Parent is the highest-level legal entity that owns more than 50% and consolidates the child entity’s accounts.
If both roles are held by the same entity, it must be reported as both Direct and Ultimate Parent.
Example 1:
- ABC Australia Ltd registers for a LEI
- ABC Australia Ltd is >50% owned and consolidated by ABC Asia Ltd,
- ABC Asia Ltd is >50% owned and consolidated by ABC Global Ltd
- There is no higher entity that consolidates the financial statements
Therefore, ABC Asia Ltd is the Direct Parent and ABC Global Ltd is the Ultimate Parent of ABC Australia Ltd.
Example 2:
- ABC Asia Ltd registers for a LEI
- ABC Asia Ltd is >50% owned by ABC Global Ltd, which consolidates its accounts
- There is no higher entity that consolidates the financial statements
Therefore, ABC Global LTD is both the Direct and Ultimate Parent of ABC Asia Ltd.