Home › CA Final › financialreporting › principalagentdetermination › Under Ind AS 110's de-facto agent assessment, OT…
Under Ind AS 110's de-facto agent assessment, OTHER parties that might act as de-facto agents include all of the following EXCEPT:
AA party that cannot finance its operations without subordinated financial support from the investor
BAn investee for which the majority of the members of board are the same as the investor's
CA party that received its interest in the investee as a contribution or loan from the investor
DAn unrelated competitor that has occasional business with the investor
Answer & Solution
Correct answer: D. An unrelated competitor that has occasional business with the investor
Para B75 — listed examples include: investor's related parties, parties receiving stake as contribution/loan, parties bound by transfer restrictions, parties dependent on subordinated investor support, investee with overlapping board majority, parties with close business relationships (e.g., key professional service providers). An unrelated competitor with occasional business is NOT a typical de-facto agent — there's no "ability to direct" relationship. Even the named categories require evaluation; they aren't automatically de-facto agents.
Related questions
Under Ind AS 110, a DEEMED SEPARATE ENTITY ("SILO") is treated as a separate investee for Under Ind AS 110, when one investor has POWER over relevant activities but ANOTHER investoUnder Ind AS 110, REPUTATIONAL RISK alone (i.e., a sponsor's incentive to step in to proteUnder Ind AS 110, a parent and its fellow subsidiary together hold voting rights in an invUnder Ind AS 110, an investee is funded primarily by short-term debt to third parties, secUnder Ind AS 110, an asset manager has wide decision-making authority, market-based 1% AUMUnder Ind AS 110, an asset manager has wide decision-making authority, receives 1% AUM + 2Under Ind AS 110, INVESTEE's KMP being current or previous employees of the INVESTOR is a: