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Consolidation/ Group Companies ACCA F7

This topic has 1 reply, 2 voices, and was last updated 7 years ago by MikeLittle.

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October 26, 2017 at 1:19 pm #413285
noushra
Member
- Topics: 2
- Replies: 1
Hello,
The only way in which a parent-subsidiary relationship can be established is for the parent company to acquire more than 50% of the ordinary shares of the subsidiary company. Is it true or false?
Thanks
October 26, 2017 at 1:26 pm #413286
MikeLittle
Keymaster
- Topics: 27
- Replies: 23200
False … for at least two reasons
1) It’s voting rights that matter, not percentage of shares held, and
2) have you completely forgotten about “effective control” and IFRS 10?
OK?
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