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  5. FAC2602 - Selected Accounting Standards And Simple Group Structures (FAC2602)

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FAC2602 Assignment 1 semester 2 2022.
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FAC2602 Assignment 1 semester 2 2022. Select the correct statement regarding shareholding and control within group structures: a. Control of another company is obtained only when the investor holds more than 50% of the shareholding. b. A percentage holding of 48% in the investee will grant the ...

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  • September 4, 2022
  • 9
  • 2022/2023
  • Exam (elaborations)
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  • fac2602
  • fac2602 selected accounting standards and simple group structures
  • selected accounting standards and simple group structures
  • fac2602 assignment 1 semester 2 2022

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FAC2602
Assignment 1
semester 2 2022.

, QUESTION 1

Select the correct statement regarding shareholding and control within group structures:

a. Control of another company is obtained only when the investor holds more than
50% of the shareholding.
b. A percentage holding of 48% in the investee will grant the investor the right to
have control.
c. A group of companies is formed only when the parent and the subsidiary agree
about the parent’s exposure to variable returns and the right to control those
returns.
d. A parent obtains control when it has power over the subsidiary, it has
exposure or rights to variable returns from its involvement with the
subsidiary and it has the ability to use its power over the subsidiary to
affect the amount of the parent’s returns.



An investor (parent) controls an investee (subsidiary) when the investor (parent) is
exposed or has rights to variable returns from its involvement with the investee
(subsidiary) and has the ability to affect those returns through its power over the
investee (subsidiary).

An investor (parent) controls an investee (subsidiary) only if all of the following is true
for the investor:

 It has power over the investee (subsidiary).
 It has exposure or rights to variable returns from its involvement with the investee.

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