When an Investor Reporting Under IFRS Owns More Than 20

question 16

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 fair value method should be used to account for the investment.
• B) should apply the cost method in accounting 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:

Operationalization

Is the process of translating concepts into variables and propositions into hypotheses.

Instrumentation

The process and method of measuring variables or gathering data in research.

Abstraction

The process of reducing complexity by focusing on the essential characteristics of something, often used in art and programming.

Non-Material Production

The creation of services, ideas, or experiences rather than physical goods.