Question

When is the loss recognized?

1) When owning more than 50%
2) When owning less than 50%
3) When owning exactly 50%
4) Cannot be determined

Answer 1

The recognition of loss in a company with multiple shareholders depends on the ownership percentage, whether it is more than 50%, less than 50%, or exactly 50%.

Step-by-step explanation:

In a large company with a significant number of shareholders, the recognition of loss depends on the ownership percentage. When a shareholder owns more than 50% of the company, the loss is recognized at their discretion. Similarly, when a shareholder owns less than 50% of the company, the loss is recognized at their discretion as well. However, when a shareholder owns exactly 50% of the company, the recognition of loss may depend on the specific agreements in place.