For the purposes of equity accounting, significant influence is regarded as the power of an investor to:

Question

Quizplus · Accepted Answer

Significant influence is when an investor has the ability to participate in the financial and operating policy decisions of an investee, but not control them. This is typically defined as having 20-50% ownership of the voting shares of an investee. Options A, B, and C all represent a level of control or management of the investee that goes beyond significant influence.

For the Purposes of Equity Accounting, Significant Influence Is Regarded