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Exactly 50% of voting right – subsidiary or associate?

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  • May 30, 2020 at 3:16 pm
    Exactly 50% of voting right – subsidiary or associate? 2
    kyle091214
    Participant

    Hi Mike,

    Thank you for your SBR lactures.

    While studying chapter4 Basic Group Structure, I come across the idea of two companies, A and B owning exactly 50% of voting power of company C.

    in this case, Can both A and B form a group structure with C?

    June 1, 2020 at 2:05 pm
    Exactly 50% of voting right – subsidiary or associate? 3
    Stephen Widberg
    Moderator

    Likely to be joint venture – if each party has right of veto.

    Or an associate if each party can exercise significant influence.

    So, either way = equity accounting.

    Unlikely to be a subsidiary.

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