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INVESTMENTS IN ASSOCIATES AND JOINT VENTURES

What is significant influence?

• IAS 28.3 definition:

• “Significant influence is the power to participate in the
financial and operating policy decisions of the investee but is
not control or joint control of these policies.”

• Significant influence assumed if 20% holding (direct
and/or indirect) or greater

• Unless clearly demonstrated otherwise

• Often evidenced by .6 factors

• Consider the impact of potential voting rights when

assessing

• Must be currently exercisable or convertible

• Ignore intentions of management

• Ignore financial ability to exercise or convert

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