The Lack of a Direct Link Between Levels of Ownership

question 51

Multiple Choice

The lack of a direct link between levels of ownership and control (i.e.the degree of ownership does not,of itself,determine if an entity has control of another) :

• A) is consistent with the AASB Framework's definition of assets, which relies on control and not legal ownership.
• B) is consistent with the AASB Framework's definition of assets, which relies on legal ownership and not control.
• C) is consistent with the AASB Framework's definition of equity, which recognises investments in other entities.
• D) is consistent with the AASB Framework's definition of equity, which relies on control and not legal ownership.

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Definitions:

Stock Dividend

A payment made by a corporation to its shareholders in the form of additional shares, rather than cash.

Fair Value

An estimate of the price at which an asset could be bought or sold in a current transaction between willing parties, not in a forced or liquidation sale.

Market Price

The current price at which an asset or service can be bought or sold in a competitive marketplace.

Stock Dividend

A dividend payment made to shareholders in the form of additional shares of stock rather than cash.