Which of the following statements is/are incorrect? 1
A、Co owns 25% of the ordinary share capital of
B、Co, which means that
B、Co is an associate of
A、Co. 2
C、Co can appoint 4 out of 6 directors to the board of
D、Co, which means that
C、Co has control over
D、Co. 3
E、Co has the power to govern the financial and operating policies of
F、Co, which means that
F、Co is an associate of
E、Co. 4
G、Co owns 19% of the share capital of
H、Co, but by agreement with the majority shareholder, has control over the financial and operating policies of
H、Co, so
H、Co is an associate of
G、Co.
A、1 and 2 only
B、1, 2 and 3 only
C、3 and 4 only
D、4 only
A、Co owns 25% of the ordinary share capital of
B、Co, which means that
B、Co is an associate of
A、Co. 2
C、Co can appoint 4 out of 6 directors to the board of
D、Co, which means that
C、Co has control over
D、Co. 3
E、Co has the power to govern the financial and operating policies of
F、Co, which means that
F、Co is an associate of
E、Co. 4
G、Co owns 19% of the share capital of
H、Co, but by agreement with the majority shareholder, has control over the financial and operating policies of
H、Co, so
H、Co is an associate of
G、Co.
A、1 and 2 only
B、1, 2 and 3 only
C、3 and 4 only
D、4 only
【参考答案及解析】
3 and 4 are incorrect. An investor must have significant influence over the investee in order for the investee to be classified as an associate. If the investor holds 20% or more of the voting power of the entity, significant influence can be assumed (unless it can clearly be shown that this is not the case). Therefore 1 is true. For an investee to be classified as a subsidiary, the investor (the parent) must have control over the investee (the subsidiary). Control can be demonstrated if the investor has the power to appoint the majority of board members of the investee, so 2 is true.3is incorrect because the power to govern the financial and operating policies of F make F a subsidiary of E.Likewise,4 is incorrect as the power to govern the financial and operating policies of H makes H a subsidiary of G
3 and 4 are incorrect. An investor must have significant influence over the investee in order for the investee to be classified as an associate. If the investor holds 20% or more of the voting power of the entity, significant influence can be assumed (unless it can clearly be shown that this is not the case). Therefore 1 is true. For an investee to be classified as a subsidiary, the investor (the parent) must have control over the investee (the subsidiary). Control can be demonstrated if the investor has the power to appoint the majority of board members of the investee, so 2 is true.3is incorrect because the power to govern the financial and operating policies of F make F a subsidiary of E.Likewise,4 is incorrect as the power to govern the financial and operating policies of H makes H a subsidiary of G