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1. associates has the power to make financial and operating decisions but does not have control to implement polices of the investee is this correct?
” IAS 28 Investment in associates, significantly influence is power and to participate on operating and financial decisions of the investee but is not control over the policies ”
2. greenie does not have control over investee ( manair) has he has > 20% voting rights, greenie only had 2 members in the board which suggest that this investment IAS 28.is this right? does it mean that the more people greenie has in the board then he may have power or it depends on others?
3.greenie provided maintenance and technical services to manair, what does this tell us about in terms ias 28?
thanks
Kerri the thing matter is that although greenie has less than 20% but it has significent influence over manair such as representation on board of director so IAS 28 applied.and remember if greenie more than 20% vote but if no representation on board of director than it is outside IAS 28
To be an associate, the investor needs to be in a position to participate in operating and policy decisions, particularly dividend policy. Your post says “power to make financial and operating decisions” and that’s not correct
Indicators of significant influence include but are not restricted to a number of matters and representation on the board is merely one such indicator. To my knowledge, it is not a requirement that the investor be represented on the board. So long as they have the right to participate in decisions, that’s enough
Provision of maintenance and technical services, interchange of knowledge and managerial personnel are two other indicators that MAY suggest significant influence, but no indicator in isolation is conclusive proof, neither one way nor the other
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