Which statement is correct about an associate?
A)An arrangement where one party has the power to participate in the financial and operating policy decisions of another entity.
B)An arrangement where one entity governs the financial and operating policies about another entity.
C)A contractual arrangement whereby two or more parties share control over an economic activity and all strategic decisions requires unanimous consent by all parties.
D)An arrangement that gives rise to a financial asset for one entity and a financial liability or equity instrument for another entity.

Question

Quizplus · Accepted Answer

An associate is defined by the ability of one party to have significant influence over the financial and operating decisions of another entity, but not control or joint control over those policies. This is typically characterized by ownership of between 20% and 50% of the voting stock of the investee.

Which Statement Is Correct About an Associate