Associate and subsidiary — OpenTuition Forums

ASalawi sayed4y ago

Hello Sir, Are There any cases where the acquisition is less than 50% will be considered as subsidiary ??? Is it possible that such cases will require consoliadtion on a line by line bases for such situations. Thanks,

P2-D2Tutor4y ago#1

Hi, In a longer question such as in section C it will always be 50% or greater giving rise to a subsidiary. You might see a narrative style question in section A where we have say 49% ownership but still have control and it asking us if it is a subsidiary, which it would be due to having control. Thanks

ASalawi sayed4y ago#2

Thanks a lot Sir.

FFrederico4y ago#3

Hello sir. From what I know, 50% ownership doesn't make one a subsidiary. Could you enlighten me?

P2-D2Tutor4y ago#4

Hi, The key to it being a subsidiary is having control, which is the power to direct the activities of the entity. Ownership of 50% of the equity shares will give us the ability to cast the majority of votes at the board meetings and so we have the ability to appoint our own directors and therefore control the entity. Thanks