Definition for : Level of control

The level of control measures the strength of direct or indirect dependence that exists between the Parent company and its subsidiaries, Joint venture or associates. This level reflects the percentage of voting rights held by the Parent company in these companies. To calculate the level of control, the percentage of voting rights held by all group companies in the Subsidiary, the Joint venture or the associates are added together, provided that the group companies are controlled directly or indirectly by the Parent company. Control is assumed when the percentage of voting rights held is 50% or higher or when a situation of de facto control exists at each link in the chain. It is important not to confuse the level of control with the Level of ownership. Level of control is also called Percentage control.

(See Chapter 6 Getting to grips with consolidated accounts of the Vernimmen)

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