Asked by
layla lopez
on Oct 14, 2024
Verified
The holding of 20% or more of the voting power in an investee entity by an investor is a presumptive test that the investee is an associate of the investor.The application of this presumptive test means that:
A) where an investor acquires a 20% equity stakeholding in an investee, the investee is an associate of the investor.
B) where an investor acquires a 20% equity stakeholding in an investee, in the absence of evidence to the contrary, the investor has significant influence over the investee.
C) an investor must have an equity stakeholding in an investee of at least 20% before the investee can be treated as an associate of the investor.
D) none of the above.
Presumptive Test
A preliminary test based on presumptions established by criteria or evidence that suggests or implies a certain condition or outcome.
Voting Power
The right of shareholders to vote on corporate matters, usually proportional to the number of shares they hold.
Equity Stakeholding
Ownership interest in a company, usually represented by holding shares of the company's stock.
- Identify the significance of holding percentages in determining the nature of investment relationships.
- Recognize the conditions under which significant influence is presumed and its indicators.
Verified Answer
MJ
Learning Objectives
- Identify the significance of holding percentages in determining the nature of investment relationships.
- Recognize the conditions under which significant influence is presumed and its indicators.