Which of the Following Can Result in a Loss of Control

question 28

Multiple Choice

Which of the following can result in a loss of control by a parent over a subsidiary?
I. The parent sells some of the shares in the subsidiary.
II. There is a change in the dispersion in the holding of shares by entities comprising the NCI.
III. There may be a change in a contractual arrangement.

• A) I, II and III
• B) I and II only
• C) I and III only
• D) II only

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Definitions:

Revenue

The income received by a company from its business activities, usually from the sale of goods and services to customers.

Expenses

Money spent or cost incurred in an entity's efforts to generate revenue, representing the cost of doing business.

Liability

An obligation of the company that arises from past transactions or events, leading to a probable future sacrifice of economic benefits.

Internal User

individuals within an organization who use financial information to make decisions, including managers and employees.