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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Definitions:

Social Readjustment Rating Scale

A scale designed to measure the amount of stress in a person's life resulting from major life changes or adjustments.

Life Change Unit

A measure in stress research quantifying the amount of life change a person experiences, often used in assessing stress levels and potential impact on health.

Minor Violation

A Minor Violation is an infringement or transgression of rules or laws considered to be of less severity or harm.

Social Readjustment Rating Scale (SRRS)

A psychological instrument that measures the stress of individuals through the quantification of major life events.