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Significant Influence 15-6 Ability exercise significant influence over operating and financalpolicies of an investee may be indicated ways, including the following on the board of directors Participation in polcy making processes Material intraentity transactions Interchange managerial persennel Technological dependency Extent of ownership by an investor of other shareholdings (but substantial or majority ownership cf the voting stock an investee by another investor does not necessarily preclude the abaty to exercise significant influence by the investor. Determining the ability of an investor to exercise significant influence is not always dear and applying jadament An investment (direkt cr indirect) of 20 percent cr mcre of the voting tock of an investee shall lead to a to the contrary an investor has the abilty to exercise significant innuence over an investee. Conversely, an investment of less than 20 percent of the voting stock ofaninvestee shall lead to a that an invester does not have the abity to exercise significant innvence unless such ability can be demonstrated. The equity the use of the equity othe investments described in this paragraph intofar as the limitations paragraph 323.10.25.2 would apply to investments other than those in subsidiaries. An investor's voting stock interest in an investee thal be bated on those currently outstanding securities whose holders have present voting privileges. Pouential voting privileges that may become available to holders of Evidence that an investor owning 20 percent or more of the voting stock cf an investee may be unable to exercise significant influence over the investee's operating and fnancial polices requires an evaluation of all the facts and circumstances relating to the investment. The presumption that the investor has the ability to exercise significant infuence over the invettee's operating and financial policies stands until overcome by that an investor may be unable to exercise significant influence over the operating and financial policies of an investee include the following Cpposition by the investee, such as tigation or complaints to governmental regulatory authorities, challenges the investors ability to exercise significant influence b. The investor and investeesign an agreement (such as a standsti agreement) under which the investor surrenders significant rights as a standstill agreement, the investor usualy agrees not to increase its ourent holdings Those agreements are oommenly used to compromise disputes an investee is fighting against a takeever in an investors percentage ownership. Depending on their provisiont, the agreements may an investor's rights or may increase certain rights and restrict others compared th the situation of an investor without Majority ownership concentrated among a small group of shareholders who operate the imestee without regard to the views of the investors to apply the equity method than is for example, the investor wants quarterlyfinancial information from an investee that publicly reports conly annualy), tries to obtain that information, and fails e. The investor tries and fails to obtain representation The list in the preceding paragraph is avstrative and is not alHinclusive. None of the individualcinoumstances unable to exercise significant innuence over the invester's operating and financial if any of these or similar circumstances exists, an investor with ownership of 20percent or more shal evaluate al facts and circumstances relating to the investment to reach a judgment about whether the presumption that the investor has the abiltyto exercise significant innvence Ger the investee's operating and financal poldesis It may to evaluate the facts and croumstances for a period of time before reaching ajudgment.

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