Consolidation/ Group Companies ACCA F7

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October 26, 2017 at 1:19 pm #413285
noushra
Member
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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
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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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