The only way in which a parent-subsidiary relationship can be established is for the parent company to acquire more than 50% of the ordinary shares of the subsidiary company. True or false?

True  atleast50% is needed to obtain a parent- subsidiar status

False, I second Mr. Ayaz Ali

False

IAS-27 Its about control and could be achieved by less50% Voting power by

agreement  with investors

power to govern financial and operating policies

Power to appoint majority of BOD

False

Answer is False.

Reason:

IFRS10 says that an investor, regardless of the nature of its involvement with an entity (the investee), shall determine whether it is a parent by assessing whether it controls the investee.

Control achieved when the investor has the following:

a) power over the investee;

b) exposue or right to variable returns from its involvement with the investee; and

c) the ability to use its power over the investee to affect the amount of the investor's returns.

False

True. It is to have a significant percentage in the control of subsidiary company

True.

Voting rights normally depends on the percentage holding of the shares.

to main tain as group of companies