FRF7
Syllabus A. THE CONCEPTUAL AND REGULATORY FRAMEWORK A4. The Concept Of A Group

A4j. Define an associate 11 / 11

MC Question 11 - Specimen

An associate is an entity in which an investor has significant influence over the investee.

Which of the following indicate(s) the presence of significant influence?

(i)

The investor owns 330,000 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 the investor

(iv)

The investor controls the votes of a majority of the board members

A    (i) and (ii) only
B    (i), (ii) and (iii)
C    (ii) and (iii) only
D    All four

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