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27 July, 22:17

Prior to 2008, CBS Corp. owned approximately 18% of Westwood One, Inc., which managed the CBS Radio Network. CBS, in turn, managed Westwood under a management agreement. Further, one employee of CBS was a member of Westwood's board of directors. CBS did not control the board of directors, however. In this situation, how should CBS account for its investment in Westwood One?

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  1. 28 July, 01:24
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    Answer and explanation:

    The influence a company may have over another when one of them has a number of shares that belongs to the other is determined by the percentage of ownership that the number of shares represent. If its lower than 20%, it is said the company has no influence over the other. From 20% to 50% one company has significant influence over the other. Finally, with more than 50% of the outstanding shares in possession, one company has control over the other.

    In that case, CBS Corp. has no influence over Westwood One, Inc. since it owns only 18% of the outstanding shares.
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Home » Business » Prior to 2008, CBS Corp. owned approximately 18% of Westwood One, Inc., which managed the CBS Radio Network. CBS, in turn, managed Westwood under a management agreement. Further, one employee of CBS was a member of Westwood's board of directors.
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