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Which of the following statements is true when assessing whether potential voting rights contribute to control? Even when potential voting rights are not exercisable or convertible until a future date or until the occurrence of a future event, they are still considered in making that assessment. O The proportions of profit or loss and changes in equity allocated to the parent and non-controlling interests are determined on the basis of present ownership, and should reflect any exercise or conversion of potential voting rights. Where potential voting rights are currently exercisable or convertible, they are considered when assessing whether an entity has the power to govern another entity's financial and operating policies. In assessing whether potential voting rights contribute to control, all of the facts and circumstances that affect those rights should be considered including the intention of management and the financial ability to exercise or convert such rights.

Which of the following statements is true when assessing whether potential voting rights contribute to control? Even when potential voting rights are not exercisable or convertible until a future date or until the occurrence of a future event, they are still considered in making that assessment. O The proportions of profit or loss and changes in equity allocated to the parent and non-controlling interests are determined on the basis of present ownership, and should reflect any exercise or conversion of potential voting rights. Where potential voting rights are currently exercisable or convertible, they are considered when assessing whether an entity has the power to govern another entity's financial and operating policies. In assessing whether potential voting rights contribute to control, all of the facts and circumstances that affect those rights should be considered including the intention of management and the financial ability to exercise or convert such rights.

FINANCIAL ACCOUNTING
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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Which of the following statements is true when assessing whether potential voting rights contribute to control? Even when potential voting rights are not exercisable or convertible until a future date or until the occurrence of a future event, they are still considered in making that assessment. The proportions of profit or loss and changes in equity allocated to the parent and non-controlling interests are determined on the basis of present ownership, and should reflect any exercise or conversion of potential voting rights. Where potential voting rights are currently exercisable or convertible, they are considered when assessing whether an entity has the power to govern another entity's financial and operating policies. In assessing whether potential voting rights contribute to control, all of the facts and circumstances that affect those rights should be considered including the intention of management and the financial ability to exercise or convert such rights.
Transcribed Image Text:Which of the following statements is true when assessing whether potential voting rights contribute to control? Even when potential voting rights are not exercisable or convertible until a future date or until the occurrence of a future event, they are still considered in making that assessment. The proportions of profit or loss and changes in equity allocated to the parent and non-controlling interests are determined on the basis of present ownership, and should reflect any exercise or conversion of potential voting rights. Where potential voting rights are currently exercisable or convertible, they are considered when assessing whether an entity has the power to govern another entity's financial and operating policies. In assessing whether potential voting rights contribute to control, all of the facts and circumstances that affect those rights should be considered including the intention of management and the financial ability to exercise or convert such rights.
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