An investor prepares a single set of financial statements which encompasses the financial results for both it and its i
An investor prepares a single set of financial statements which encompasses the financial results for both it and its investee because:
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a. |
The investor has a controlling interest in its investee. |
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b. |
The investor has a passive interest in its investee. |
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c. |
The investor has an influential interest in its investee. |
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d. |
The investor has an active interest in its its investee. |
Now a days in the corporate world which is very competitive , efforts are made to take control of rival companies at the minimum possible amount to avoid cut-throat competion and ensure survival in a proper manner.
so normally when an investor company purchases around more than 50% of share capital of the investee company , it obtains more than 50% voting power as the decisions in the companies are taken on the basis of voting by shareholders. So when a company holds 50% or more shares together then it gets full control over the investee company.
With this info we will solve the above MCQ as under --
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