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R Ltd. holds 10% of Y Ltd.'s equity and has licensed essential tyre-manufacturing technology to Y. Y is dependent on R's know-how to operate. Is R an investor with significant influence under Ind AS 28?
AYes — provision of essential technical information is an Ind AS 28 indicator of significant influence and overrides the below-20% presumption on these facts
BYes — but only if the royalty rate is above market
CNo — 10% is well below the 20% threshold
DNo — licensing is independent of equity participation
Answer & Solution
Correct answer: A. Yes — provision of essential technical information is an Ind AS 28 indicator of significant influence and overrides the below-20% presumption on these facts
Provision of essential technical information is an explicit Ind AS 28 indicator. The 20% presumption is rebuttable in both directions — below 20% with these indicators, significant influence still exists.
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