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Chapter 14

1.4 Accounting for sub-subsidiaries in a vertical group: Effective
shareholding

Effective shareholding = (P% in S) × (S% in sub-sub)

Using group structure set out previously.

Effective shareholding = 80% × 80% = 64%.

NCI % = 36%.

Be aware that P’s effective shareholding does not need to be above
50% for P to have indirect control in the sub-sub.

As long as the subsidiary has a controlling interest in the sub-sub,
the parent will have indirect control, irrespective of the effective
shareholding. %.

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