Ican 2021 Corporate Reporting Question 6

Awa Publish has just recently acquired 18% of the shareholding in Tunbe, making it the second largest single shareholder. The majority shareholder has 58% voting shares, while the remainder of the shares is held by ten other shareholders with none holding more than 5% voting shares. The board of directors of Tunbe is made up of 12 members with Awa Publish having 3 members and the majority shareholder having 7 members. Awa Publish was able to negotiate its representation on the board due to its strategic importance in Tunbe operations and expansion plans. The directors of Awa Publish accounted for its investment in Tunbe as an equity investment. The directors feel that Tunbe should not be accounted for as an associate, because Awa Publish does not have 20% of the voting interest and thus does not exercise significant influence over Tunbe.