Exco’s articles of association require a 80% majority to

approve decisions regarding Exco’s relevant activities. Each shareholder is

entitled to vote in proportion to the number of shares held.

There are no facts that suggest that any of the shareholder

has rights to Exco’s assets or obligations

for Exco’s liabilities.

Which of the following statements is correct:

(i) 

A plc should use the equity method of

accounting to recognise Exco plc in its consolidated financial statements