Entity A owns 25% of the voting rights inEntity B. However, Entity A has norepresentation on the board of directors ofEntity B. Which of the following statementsis correct? *Entity A cannot be presumed to havesignificant influence over Entity B becauseEntity A does not have boardrepresentation.Entity A is presumed to have significationinfluence over Entity B because it holds25% or more of the voting rights in Entity B.Entity A is presumed to have significationinfluence over Entity B because it holds20% or more of the voting rights in Entity B.Representation on an investee's board ofdirectors is never considered whendetermining the existence of significantinfluence.

The meaning of significant influence has been defined under IAS 28, if an entity holds 20% or more…

Entity A owns 25% of the voting rights in Entity B. However, Entity A has no representation on the board of directors of Entity B. Which of the following statements is correct? * Entity A cannot be presumed to have significant influence over Entity B because Entity A does not have board representation. Entity A is presumed to have signification O influence over Entity B because it holds 25% or more of the voting rights in Entity B. Entity A is presumed to have signification O influence over Entity B because it holds 20% or more of the voting rights in Entity B. Representation on an investee's board of directors is never considered when determining the existence of significant influence.

Entity A owns 25% of the voting rights in Entity B. However, Entity A has no representation on the board of directors of Entity B. Which of the following statements is correct? * Entity A cannot be presumed to have significant influence over Entity B because Entity A does not have board representation. Entity A is presumed to have signification O influence over Entity B because it holds 25% or more of the voting rights in Entity B. Entity A is presumed to have signification O influence over Entity B because it holds 20% or more of the voting rights in Entity B. Representation on an investee's board of directors is never considered when determining the existence of significant influence.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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