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.

Question

Quizplus · Accepted Answer

IFRS 3 Business Combinations defines control as the ability to direct the activities of a company that most significantly affect the investor's returns. This definition is broader than just owning a majority of voting shares or being able to elect a majority of the board members, as it includes the ability to direct the company's activities regardless of the ownership structure or board composition. Therefore, option C is the closest to the IFRS 3 definition of control.

Which of the Following Is Closest to IFRS 3 Business