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Answers13 Strategic Professional Essentials, SBR INTS trategic Business Reporting International (SBR INT) March/June 2021 Answers1 (a) (i) An acquirer is the entity which has assumed control over another entity. In accordance with IFRS 10 Consolidated Financial Statements, an investor controls an investee where it has: Power over the investee; Exposure or rights to variable returns from its involvement with the investee; The ability to use its power over the investee to affect the amount of the investor s returns. There are a significant number of factors to consider when determining which entity should be treated as the acquirer. The first factor to consider is the consideration transferred for the relative share of ownership.

A second factor to consider is who has the rights to appoint the majority of the governing body. Columbia Co can appoint 60% of the board suggesting they may be the acquirer. It is true that Brazil Co does have additional rights in terms of the power to veto amendments to the articles of incorporation and the appointment of auditors.

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