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Hiya I’ve been a bit confused doing a question, basically A owns 80% of B who owns 60% of C. So effective interest is 48% (which I thought was associate and no control, so you don’t consolidate) but the answer key also puts up C on the consolidated P/L (all revenue, cost of sales, etc.) can someone please help I’m so confused?!
My understanding is that if A controls B, and B controls C, then A effectively controls C because A can force B to force C to act in a certain way.
Correct, don’t think about control being just solely about owning greater than 50% of the equity share capital. Control is all about the power to direct and as pointed out correctly if we control B and B then controls C then we effectively control C. It doesn’t matter that we own 48%, as we can direct what C does.
Thanks
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