Associates

Which of the following are likely to be accounted for as an
associate in the consolidated financial statements of TN?
(i) A 25% shareholding in ZT. TN can appoint a director to the
board. There are 4 directors on the board in total, and none
have control.
(ii) A 25% shareholding in ZU. ZU is 70% owned by a company
called TU.
(iii) A 25% shareholding in ZV. TN have also got an
arrangement with other shareholders allowing them access
to 55% of the voting rights in TN.
A (i) only
B (i) and (ii)
C (ii) and (iii)
D All three

ANS
A – Item (ii) is likely to be regarded as a financial asset, as TN
have no significant influence. Item (iii) is likely to be classed as a
subsidiary, as TN seem able to exercise control.

Good day,Please i don’t understand why the answer isn’t B since the holding is more than 20%. I’ll appreciate if you can explain better.