Significant influence automatically arises where the investor holds 20% or more of the shares in the investee.

Question

Quizplus · Accepted Answer

Holding 20% or more of the shares in the investee indicates the potential for significant influence, but it does not automatically arise. The determination of significant influence also considers other factors such as representation on the board of directors, participation in policy-making processes, material transactions between the entities, interchange of managerial personnel, or provision of essential technical information.

Significant Influence Automatically Arises Where the Investor Holds 20% or More