Subject CT2 Finance and Financial Reporting
The attached subject report has been written by the Principal Examiner with
the aim of helping candidates. The questions and comments are based around
Core Reading as the interpretation of the syllabus to which the examiners are
working. They have however given credit for any alternative approach or
interpretation which they consider to be reasonable.
Chairman of the Board of Examiners
15 June 2005
Faculty of Actuaries
Institute of Actuaries
Subject CT2 (Finance and Financial Reporting Core Technical) April 2005 Examiners Report
11 The principal test is whether Company A can control Company B.
There are some guidelines for the measurement of control in the Companies Act and
This could happen if Company A has purchased more than 50% of the voting shares.
Control might also arise if Company A can appoint or remove directors to or from the
board of Company B,
particularly if it could control more than 50% of the votes at board meetings in this
Company A might also be able to exercise a dominant influence over Company B,
for example by entering int