Q1. A own > 50% voting rights of B, and has the right to appoint three out of four board members of B. Most decisions that significantly affect B’s returns require consensus from all board members. Does A have control over B (non-VIE) per IFRS vs. US GAAP? Q2. A own < 50% voting rights of B, but has the right to appoint four out of seven board members of B. One of these four board members rarely attends board meetings. Most decisions that significantly affect B’s returns require majority votes of board members. Does A have control over B (non-VIE) per IFRS vs. US GAAP? Q3: Do you favor effective control or legal control?
Q1. A own > 50% voting rights of B, and has the right to appoint three out of four board members of B. Most decisions that significantly affect B’s returns require consensus from all board members. Does A have control over B (non-VIE) per IFRS vs. US GAAP? Q2. A own < 50% voting rights of B, but has the right to appoint four out of seven board members of B. One of these four board members rarely attends board meetings. Most decisions that significantly affect B’s returns require majority votes of board members. Does A have control over B (non-VIE) per IFRS vs. US GAAP? Q3: Do you favor effective control or legal control?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Q1. A own > 50% voting rights of B, and has the right to appoint three out of four board members of B. Most decisions that significantly affect B’s returns require consensus from all board members. Does A have control over B (non-VIE) per IFRS vs. US GAAP?
Q2. A own < 50% voting rights of B, but has the right to appoint four out of seven board members of B. One of these four board members rarely attends board meetings. Most decisions that significantly affect B’s returns require majority votes of board members. Does A have control over B (non-VIE) per IFRS vs. US GAAP?
Q3: Do you favor effective control or legal control?
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