25. Group Accounts: Further Points

Question 1

When does control exist of a company?

Answer 1

Whe the parent company has either:
- Over 50% of shares
- Power over more than half the voting right by virtue of an agreement with other investors
- Power to govern financial and operating policies of the entity under statue or agreement
- Power to appoint or remove the majority of the directors or equivalent governing body
- Power to cast the majority of votes at the meetings of the directors or equivalent governing body

Question 2

What is an associate company?

Answer 2

When the investor has significant influence over the entity, but it is not a subsidiary.

Question 3

When is a company an associate?

Answer 3

When the investor holds from 20-50% of the shares.