When an Investor Owns Less Than a Majority of the Voting

question 85

Multiple Choice

When an investor owns less than a majority of the voting stock of another corporation, the accountant must judge when the investor can exert significant influence.For the sake of uniformity, U.S.GAAP and IFRS presume that significant influence exists at ownership of _____ or more of the voting stock of the investee. (Assume that management does not have a contractual or other basis to demonstrate that influence.)

• A)5 percent
• B)10 percent
• C)15 percent
• D)20 percent
• E)30 percent

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