Directors are under a duty to exercise independent judgment. What does this mean? Why do floating charge holders frequently include a negative pledge clause in the charge?
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Directors are under a duty to exercise independent judgment. What does this mean?
Why do floating charge holders frequently include a negative pledge clause in the charge?
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- Why do floating charge holders frequently include a negative pledge clause in the charge.Which of the following statements is consistent with the principle of control as defined by IFRS 10 Consolidated Financial Statements? a. The investor must be exposed to a return from the investee. b. The investor has the ability to use its power over the investee to affect the amount of the returns from the investee. c. An investor yet to direct the relevant activities of an investee has no power over the investee. d. An investor cannot have control over an investee if another investor has existing rights to participate in the direction of the relevant activities.If the shareholder’s position is not protected by a contract – unlike the provider of debt- how is it in fact made viable? Discuss
- The relationship between a banker and its customers are not only fiduciary in nature but contractual as well. Therefore under any contractual terms, there exist terms and conditions, also known as an exclusion clause to protect the maker of the statement. With regards to case law, explain the rules of “incorporating” an exclusion clause in order for it to work.Which of the following is an example of protective rights? Rights to appoint or remove another entity that directs the relevant activities The right of a party holding a non-controlling interest in an investee to approve the issue of equity or debt instruments Rights to veto any changes for the benefit of the investor All of the choicesInformation is considered material if: it would have a bearing on decisions of those who use the financial statements. there is a substantial likelihood that a reasonable investor would not be concerned about the information. an item is so insignificant that users would likely ignore it. the FASB explicitly rules the transaction or item to be material.
- Explain why a duty to prevent insolvent trading is imposed on directors by statute. Provide an exampledefine contingent liability and give an example. How would you management of a company distort a liability if they wish to report less liability in the financial statement.The fundamental accounting principle requires “full disclosure.” What are the consequences of not disclosing enough? Can there be too much disclosure?
- What are ‘free-riders’? How can a system ensure that those who benefit most from an accounting standard requiring certain disclosures also bear the greatest costs of it?Are non-IFRS financial data different from the IFRS financial information? How may RG230 be used to minimize the disclosure of non-IFRS financial information that may be misleading to investors?how does financial risk relate to the Washington Mutual case and how can it be mitigated
