Under IFRS 10, parent corporation is the entity that controls one or more entities. How does IFRS 10 define control? Choose the best answer A. An investor controls an investee when it owns more than 50% of all the outstanding capital stocks, whether common or preferred. B. An investor controls an investee when it has the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities. C. An investor controls an investee when it has the ability to influence the financial and operating policies of an entity so as to obtain benefits from its activities. D. An investor controls an investee when it is exposed, or has the right to variable return from the investment with the investee and has the ability to affect those returns through the power over the investee.

Under IFRS 10, parent corporation is the entity that controls one or more entities. How does IFRS 10 define control? Choose the best answer A. An investor controls an investee when it owns more than 50% of all the outstanding capital stocks, whether common or preferred. B. An investor controls an investee when it has the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities. C. An investor controls an investee when it has the ability to influence the financial and operating policies of an entity so as to obtain benefits from its activities. D. An investor controls an investee when it is exposed, or has the right to variable return from the investment with the investee and has the ability to affect those returns through the power over the investee.

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter14: Corporation Accounting

Section: Chapter Questions

Problem 5MC: Which of the following is not one of the five primary responsibilities of the Securities and...

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It is frequently stated that the one purpose of the preemptive right is to allow individuals to maintain their proportionate share of the ownership and control of a corporation.a. How important do you suppose control is for the average stockholder of a firm whose shares are traded on the New York Stock Exchange?b. Is the control issue likely to be of more importance to stockholders of publicly owned or closely held (private) firms?
When an investor is deemed to have control" over an investee, GAAP requires presentation of consolidated financial statements. Which of the following would not be considered an indicator of control?\\nSelect one:\\nA. The investor owns 40% of the investee's stock and the rest is owned by the investee's founder.\\nB. The investor has majority interest in the investee.\\nC. Instead of owning stock, a company licenses technology to another company in an agreement allowing the licensor to appoint a majority of the licensee's board of directors.\\nD. The investor owns 40% of the Investee's stock and the rest is owned by a large number of small investors.
An associate is an entity in which an investor has significant influence over the investee.Which TWO of the following indicate the presence of significant influence?I The investor owns 360,000 of the 1,500,000 equity voting shares of the investee.II The investor has representation on the board of directors of the investee.III The investor is able to insist that all of the sales of the investee are made to a subsidiary of theinvestor.IV The investor controls the votes of a majority of the board membersA I and IIIB II and IVC I and IID III and IV
‘An associate is an entity over which the investor has significant influence’ (para 3). Which of the following indicate the presence of significant influence? A. The investor controls the votes of a majority of the board members B. The investor is able to insist that all of the sales of the investee are made to a subsidiary of the investor C. The investor owns 330,000 of the 1,500,000 equity voting shares of the investee
Applying the principles of control in IFRS 10 Consolidated Financial Statements, you are required to consider whether certain investments in Newcastle plc are subsidiaries: a) Newcastle plc owns 45% of the voting shares of Hull Ltd b) Newcastle plc owns 60% of the voting shares of Bradford Ltd and Bradford owns 30% of the voting shares of Reading Ltd. Recently, Newcastle plc purchased 70% of the voting shares of Coventry Ltd. Coventry Ltd owns 30% of the voting shares of Reading Ltd. The accountant of Newcastle plc believes that Dery Ltd. is not a subsidiary of Newcastle, as Newcastle effectively owns only 39% of the shares of Reading - 60% x 30% = 18% through Bradford and 70% x 30% = 21% through Coventry. c) Recently, Newcastle plc purchased 60% of the ordinary shares of Sunderland plc. Prior to the purchase, Sunderland plc had in issue 6,000,000 ‘A’ shares of £1 each. Each ‘A’ share carries a single vote. These shares were owned equally by each of the directors of Sunderland plc.…
Which of the following is not a characteristic of the commonstock of a large, publicly owned corporation?a. The shares may be transferred from one investor toanother without disrupting the continuity of businessoperations.b. Voting rights in the election of the board of directors.c. A cumulative right to receive dividends. d. After issuance, the market value of the stock is unre-lated to its par value.
Which of the following statements is CORRECT? A The stock of publicly owned companies does not need to be registered with and reported to a regulatory agency such as the SEC. B When a corporation's shares are owned by a few individuals, we say that the firm is publicly traded. C "Going public" establishes a firm's true intrinsic value and ensures that a liquid market will always exist for the firm's shares. D When stock in a closely held corporation is offered to the public for the first time, the transaction is called "going public, or an IPO," and the market for such stock is called the new issue or IPO market. E If a firm goes public, it will always raise additional new capital for the firm itself.
Which of the following characteristics of a corporation limits a stockholder's loss to the amount of his or her investment in the stock of the corporation? Question 7Answer a. Separate legal entity b. Separation of ownership and management c. Transferability of ownership d. Limited liability
Which of the following is not a characteristic of a corporation? a.Corporations experience an ease in obtaining large amounts of resources by issuing stock. b.A corporation's resources are limited to its individual owners' resources. c.Ownership is divided into shares of stock. d.Corporations are organized as a separate legal taxable entity.
Why it is called that if a company acquires more than 50% of the voting stock of another company, it’s said to have control?
Which of the following is not a characteristic of a corporation? a.Corporations experience an ease in obtaining large amounts of resources by issuing stock. b.Corporations are organized as a separate legal taxable entity. c.Ownership is divided into shares of stock. d.A corporation's resources are limited to its individual owners' resources.
Which of the following statements is NOT CORRECT? (A) Going public establishes a firm's true intrinsic value and ensures that a liquid market will always exist for the firm's shares (B) Publicly owned companies have sold shares to investors who are not associated with management, and they must register with and report to a regulatory agency such as the SEC. (C) When stock in a closely held corporation is offered to the public for the first time, the transaction is called "going public." and the market for such stock is called the new issue market (D) It is possible for a firm to go public and yet not raise any additional new capital (E) When a coporation';s shares are owned by a few individuals who own most of the stock or are part of the firm's management, we say that the firm is "closaly, or privately, held.