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The only way in which a parent-subsidiary relationship can be established is for the parent company to acquire more than50% 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
