The correct answers are:

• E Co has the power to govern the financial and operating policies of F Co, which means that F Co is an associate of E Co.

• G Co owns 19% of the share capital of H Co, but by agreement with the majority shareholder, has control over the financial and operating policies of H Co, so H Co is an associate of G Co.

An investor must have significant influence over the investee in order for the investee to be classified as an associate. If the investor owns between 20% and <50% of the ordinary shares of the investee, significant influence can be assumed, therefore B Co is an associate of A Co.

For an investee to be classified as a subsidiary, the investor must have control over the investee. Control can be demonstrated if the investor can appoint the majority of board members of the investee, so C Co has control over D Co.

F Co is not an associate of E Co because the power to govern the financial and operating policies of F Co makes F Co a subsidiary of E Co.

Likewise, H Co is not an associate of G Co as control over the financial and operating policies of H Co makes H Co a subsidiary of G Co.