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AS18

Accountancy

First thing, 60% on 30% = 18% indirect control Second thing, 22% direct control 18+22 = 40% but not more than 50%(more than half voting power) I know that I'm wrong, but tell me why am i wrong. Treat me as a layman.

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Sai Akash rockster

Sai Akash rockster

CA Inter

5

09-Apr-24 16:37

82

Answers (3)

A controls B so B will do whatever A says. If A asks B to vote in favour of a particular resolution - B will vote with 30% and A will vote will 22% So A can easily get >50% votes in matters related to C.


CA Suraj Lakhotia

CA Suraj Lakhotia

Admin

09-Apr-24 16:43

Thank you sir, doubt cleared. Let's say ,for the time being, there is no definition given in as18 for a related party relationship; Now i understood that Unlike the relationship of holding subsidiary under AS21 which requires more than 50%, AS18 only requires a significant influence of minimum 20% or more at any cost to be considered as a Related party. That's why in calculation of cost of control under as21, we do the calculation that I've texted above, i.e; 60% on 30%; whereas in as18 , we do take entire voting rights of our subsidiary while calculating the % Am i right sir ?


Thread Starter

Sai Akash rockster

Sai Akash rockster

CA Inter

5

09-Apr-24 17:30

MCQs Now