Page 15 - Topic 1 - 1. Consolidated & Separate Financial Statement

CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS

Power: Voting Rights (B34 – B54)

• Voting rights often determine the ability to direct the relevant
activities

• May have power if holding a majority of voting rights

• If relevant activities are directed by majority of the voting rights, or
• Board directs relevant activities and board members are elected by
majority of voting rights

• May not have power if holding a majority

• Someone else directs relevant activities
• Voting rights aren’t substantive

• May have power if holding less than a majority of voting rights

• If holder has practical ability to direct the relevant activities unilaterally
• Consider:

• Current and potential voting rights
• Rights from other contractual agreements
• E.g. Collective voting agreements
• Additional facts and circumstances

• E.g. Voting patterns at previous meetings

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