If an Investor Entity Owns More Than Half of the Voting

question 11

Multiple Choice

If an investor entity owns more than half of the voting or potential voting power of an investee and does not account for the investment as a subsidiary, IFRS 12 requires the following disclosure:

• A) the reasons why the ownership of the investee does not constitute control;
• B) the nature of the relationship between the investor and investee;
• C) the significant judgements and assumptions it has made in determining the nature of the interest in the other entity;
• D) the amount of any repayments of borrowings between the investor and investee during the period.

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Definitions:

Common Stock

A type of equity security that represents ownership in a corporation, with holders having voting rights and potentially receiving dividends.

Net Income

The total earnings of a company after all expenses and taxes have been deducted from revenue, indicating the company's profit.

Trial Balance

An accounting report that lists the balances of all accounts in the general ledger at a particular point in time to check for errors.

Cash

Liquid assets held by a company, used to settle debts, purchase goods and services, or meet immediate needs; a fundamental indicator of financial health.