Asked by Alexandra Barrett on Jul 04, 2024
Verified
When an investee can be significantly influenced, it is known as a(n)
A) subsidiary.
B) associate.
C) trading investment.
D) parent.
Associate
In a business context, this usually refers to a person or entity that is connected with another as a partner, colleague, or member of an enterprise.
Subsidiary
A company that is completely or partially owned and controlled by another company, known as the parent company.
- Identify the implications of significant influence and control in relation to investment accounting.
Verified Answer
MB
Mohammed BaselmJul 04, 2024
Final Answer :
B
Explanation :
When an investee can be significantly influenced by an investor, it is known as an associate. This typically occurs when the investor holds 20% to 50% of the voting power of the investee.
Learning Objectives
- Identify the implications of significant influence and control in relation to investment accounting.
Related questions
When an Investor Reporting Under IFRS Owns More Than 20 ...
When an Investor Owns Between 20% and 50% of the ...
A Company That Owns More Than 50% of the Common ...
An Investing Company That Owns ________ of Another (Investee)company's Voting ...
Townsend Ltd. Has the Following Shareholders: Palermo Co.-60 ...