Acquisition or equity method when representation on board but no control

CFA Level II FRA
#1

When you have representation on board of directors, between 50% and 25% of control, but no control, you use equity method?

I know this sounds simple since I said “no control” but I feel as if the practice tests are giving me conflicting answers.

#2

Use equity method when you have joint control or signficicant influence (20%~50% or lower share but with seats on the board).

Consodidation method when you have control (>50% or more than half of the seats on the board)

#3

so when does significant influence but less than 50% mean you use acquisition method? Would it be more than sig influence (IE Control)?

I’m just trying to imagine what key words they would use in the vignette to suggest acquisition method when you control less than 50%

#4

The key is whether you have control or merely influence. They may use one of those words on the exam; that’s what matters. If they don’t use either word, assume control with more than 50% ownership, assume influence (but no control) with 20% to 50% ownership, and assume no influence with less than 20% ownership.