Is there a parent-subsidiary relationship in each of the situations below? Discuss. If the situation is...
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Is there a parent-subsidiary relationship in each of the situations below? Discuss. If the situation is ambiguous, discuss the facts or circumstances that should be considered for the determination of a parent-subsidiary relationship. (a) Company A holds 40% of the voting rights of Company B. The remaining 60% of the voting rights are held by 12 investors, each holding 5%. (3 marks) (b) Company C owns 50 million ordinary shares issued by Company D. The total number of ordinary shares issued by Company D is 100 million. Company C also holds $500,000 of convertible bonds issued by Company D. Each $1 of the bonds can be converted into 4 ordinary shares of Company D. The total amount of outstanding convertible bonds at the year-end is $800,000. Company C has a current right to convert the bonds into ordinary shares but chooses to hold the debt securities to maturity. Is there a parent-subsidiary relationship in each of the situations below? Discuss. If the situation is ambiguous, discuss the facts or circumstances that should be considered for the determination of a parent-subsidiary relationship. (a) Company A holds 40% of the voting rights of Company B. The remaining 60% of the voting rights are held by 12 investors, each holding 5%. (3 marks) (b) Company C owns 50 million ordinary shares issued by Company D. The total number of ordinary shares issued by Company D is 100 million. Company C also holds $500,000 of convertible bonds issued by Company D. Each $1 of the bonds can be converted into 4 ordinary shares of Company D. The total amount of outstanding convertible bonds at the year-end is $800,000. Company C has a current right to convert the bonds into ordinary shares but chooses to hold the debt securities to maturity.
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Related Book For
Intermediate Accounting IFRS
ISBN: 978-1119372936
3rd edition
Authors: Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield
Posted Date:
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