Identification of associates
A holding of 20% or more of the voting power (directly or through subsidiaries) will indicate significant influence unless it can be clearly demonstrated otherwise. If the holding is less than 20%, the investor will be presumed not to have significant influence unless such influence can be clearly demonstrated. [IAS 28.6]
The existence of significant influence by an investor is usually evidenced in one or more of the following ways: [IAS 28.7]
• representation on the board of directors or equivalent governing body of the investee
• participation in the policy-making process
• material transactions between the investor and the investee
• interchange of managerial personnel
• provision of essential technical information
Potential voting rights are a factor to be considered in deciding whether significant influence exists. [IAS 28.9]