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Accounting

  Accounting   |   Terms
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  • December 22, 2020
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Control of an Investee

An investor controls an investee when the former has power over the latter. Control is also manifested in the exposure of an investor to, or its rights in, variable returns that arise from its involvement with an investee, and its ability to affect the returns through that power. Variable returns are those returns that are not fixed (by contract or contractual arrangements) and have the potential to vary depending on how the investee performs over time.

Variable returns can be positive, negative or both.


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