Question

A company acquires a 25% investment in another corporation. The reporting of this investment depends primarily onThe percentage of ownershipThe length of time that the investor intends to own the investmentTechnology dependencyMaterial intercompany transactionsThe degree of influence that the investor has over the investee

Answer 1

Answer: The degree of influence that the investor has over the investee.

To report this investment within the company's financial statements, according to IFRS, they depend into two options:

1. Stock control: An entity controls a business when it is exposed or has rights over earnings and has the ability to affect these results through its power in the business.
2. Minority percentage: The acquirer recognizes in their books an uncontrolled participation and in this case, no decisive decisions can be made.