When an Investor Reporting Under IFRS Owns More Than 20

question 71

Multiple Choice

When an investor reporting under IFRS owns more than 20% of the common shares of a corporation, it is generally presumed that the investor

• A)has insignificant influence on the investee and that the cost method should be used to account for the investment.
• B)should use the fair value through profit or loss model to account for the investment.
• C)will prepare consolidated financial statements.
• D)has significant influence on the investee and that the equity method should be used to account for the investment.

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Definitions:

Involuntary Muscles

Muscles that operate without conscious control, involved in functions such as heartbeat and digestion.

Somatic

Pertaining to or affecting the body, especially as distinct from the mind or the environment.

Pituitary Gland

A small endocrine gland in the brain that produces hormones influencing various bodily functions, including growth, metabolism, and reproduction.

Master Gland

A term commonly used to describe the pituitary gland due to its key role in regulating numerous other endocrine glands and their hormone production.