In the Absence of Other Evidence,common Stock Ownership of 20

question 34

Essay

In the absence of other evidence,common stock ownership of 20 percent or more is viewed as indicating that the investor is able to exercise significant influence over the investee.What are some of the other factors that could constitute evidence of the ability to exercise significant influence?

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Definitions:

One-Line Method

A method used in accounting to consolidate a parent company's investment in a subsidiary when only a minority interest is owned.

Joint Control

A situation in corporate governance where two or more parties agree to share control over a business activity, ensuring decisions are made unanimously.

Deferred Exploration Expenditure

Costs incurred in the exploration of resources which are not immediately expensed but are capitalized and amortized over time.

Accumulated Depreciation

The total amount of a tangible asset's cost that has been allocated as depreciation expense since the asset was put into use.