CERTYNEX IFRS ACADEMY

Cèdre SA holds the right to approve Lierre SA's business plan. Under the agreement, this right can be exercised only after 18 months, whereas the decisions on Lierre's relevant activities are taken in the meantime (case data). What is concluded about this right?

It is substantive because it exists legally in the agreement, which is enough to confer power.

It is substantive because Cèdre derives an economic benefit from it, whenever it may be exercised.

It is substantive, the exercise delay being irrelevant as long as the right is in a written contract.

It is not substantive until it is exercisable when decisions are taken: it does not confer power.