Asked by Joshua Brinson on Jun 16, 2024
Verified
Which of the following is closest to IFRS 3 Business Combinations definition of control?
A) A company is deemed to have control over another only when it owns a majority of the voting shares of another company.
B) A company is deemed to have control when it can elect a majority of the Board members of another company.
C) Control is the ability to direct the activities of a company that most significantly affect the investor's returns.
D) Control exists only when a company has the continuing power to determine the operating and financing policies of another company and attempts to exercise such powers.
Control
The power to govern the financial and operating policies of an entity so as to obtain benefits from its activities, often through ownership of a majority of voting rights.
IFRS 3
An international financial reporting standard that provides guidance on accounting for business combinations, requiring acquired assets and liabilities to be recorded at fair value.
Business Combinations
Transactions or events in which one entity gains control over one or more other entities, often involving mergers and acquisitions.
- Acquire knowledge of the prerequisites and deliberations for establishing control in business consolidations under the International Financial Reporting Standards.
Verified Answer
Learning Objectives
- Acquire knowledge of the prerequisites and deliberations for establishing control in business consolidations under the International Financial Reporting Standards.
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