A Company May Own More Than 50 Per Cent of the Capital

question 13

True/False

A company may own more than 50 per cent of the capital of another entity and not have effective control of that entity as defined in AASB 3:

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Definitions:

Residual Value

The projected worth of an asset upon reaching the conclusion of its service period.

Straight-line Method

A depreciation method that allocates an equal amount of depreciation each year over the useful life of an asset.

MACRS

Modified Accelerated Cost Recovery System, a method of depreciation in the U.S. that allows businesses to recover investments in certain property through annual deductions.

Property

Physical or intangible assets owned by an individual or business, including land, buildings, and intellectual property.