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X Ltd. holds 50% of voting rights, Y Ltd. and Z Ltd. each hold 25%. Decisions require at least 75% of voting rights. Is this a joint arrangement?
AYes, X has joint control with either Y or Z
BNo — multiple combinations can reach 75% (X+Y or X+Z), and the contract does not specify which combination is required; without specification, no single combination has 'joint' control
CYes, X has joint control with Y and Z together
DYes, all three parties have joint control jointly
Answer & Solution
Correct answer: B. No — multiple combinations can reach 75% (X+Y or X+Z), and the contract does not specify which combination is required; without specification, no single combination has 'joint' control
When more than one combination of parties can deliver the required threshold and the contract does not name which combination must agree, the arrangement fails the joint-control test. Ind AS 111 requires the agreement to identify the parties whose unanimous consent is required.
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