CA Inter P1 · Chapter 8 · Question 1 of 10
Under AS 21, control of an enterprise exists when the parent:
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: C) Owns, directly or indirectly through subsidiaries, more than one-half of the voting power, or controls the composition of its board of directors
Explanation
AS 21 defines control as ownership of more than one-half of the voting power of an enterprise (directly or through subsidiaries), or control of the composition of its board of directors (or governing body) so as to obtain economic benefits. 20% ownership with significant influence indicates an associate (AS 23), and joint control indicates a joint venture (AS 27).
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