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Adv._Acct_Case_by_john_and_steven_and_jim - will manage the...

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According to IFRS IAS 27, “controls presumed to exist when the parent owns, directly or indirectly through subsidiaries, more than half of the voting power of an entity unless, in exceptional circumstances, it can be clearly demonstrated that such ownership does not constitute control. Control also exists when the parent owns half or less of the voting power of an entity when there is: power to govern the financial and operating policies of the entity under a statute or an agreement.” In this case with Centcom, Inc. they entered into an agreement to manage Britel. The agreement consists of Centcom managing Britel for five years, and Centcom
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Unformatted text preview: will manage the administrative and operational activities of Britel including hiring and terminating employees. Because Centcom has the power to govern the financial and operating policies of Britel, under an agreement they can consolidate Britel under IFRS. According to IFRS 3 paragraph 3, a business combination is identified as long as the assets acquired and liabilities assumed constitute a business. Under Centcom and Britel’s agreement Centcom is required to fund any shortfalls creating a liability for Centcom whereas TTL Group has no responsibility to fund Britel’s operations....
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