When an Investor Reporting Under IFRS Owns More Than 20

question 123

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:

Validity Rules

Guidelines and principles used in logic to determine whether arguments are valid, ensuring that the conclusion necessarily follows from the premises.

Validity Rules

Guidelines or principles used to determine whether an argument or reasoning process is logically sound and its conclusions are based on true premises.

Existential Import

The implication that a statement makes about the existence of the subjects it mentions.

Modern Assumptions

Contemporary beliefs or presuppositions that influence one's perspective or argument, often taken for granted within a specific time period.