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    Question

    Investor A holds 42% of voting rights in TargetCo; the

    remaining shares are widely dispersed with no other holder above 3%. Investor A also has substantive rights to appoint key management and provides essential funding via an exclusive facility. Historic meetings show passive minority participation and AтАЩs proposals always pass. Should Investor A consolidate TargetCo and on what basis?
    A NoтАФcontrol requires >50% voting rights. Correct Answer Incorrect Answer
    B YesтАФde-facto control via dominant voting interest and dispersion of others. Correct Answer Incorrect Answer
    C NoтАФfunding arrangements are protective rights only. Correct Answer Incorrect Answer
    D YesтАФpower via potential voting rights only. Correct Answer Incorrect Answer
    E NoтАФneeds a board majority plus >50% votes. Correct Answer Incorrect Answer

    Solution

    Control under Ind AS 110 focuses on power over relevant activities, exposure to variable returns, and ability to affect those returns. With dispersed others, consistent decision-making power, and substantive rights/funding dependence, A likely has de-facto control and must consolidate.

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