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(a) Mozart Ltd and Beethoven Ltd own 45% and 55% respectively of the ordinary shares that carry equal voting rights at a general meeting of
(a) Mozart Ltd and Beethoven Ltd own 45% and 55% respectively of the ordinary shares that carry equal voting rights at a general meeting of shareholders of Bach Ltd. Mozart Ltd has the ability to appoint or remove the majority of the members of the board of directors of Bach Ltd. Beethoven Ltd, however, holds some options of Mozart Ltd, which, once exercised, allow Beethoven Ltd to acquire 10% of Mozart Ltd's voting rights. These options are exercisable for the next four years, but the exercise price is significantly out of the money (and is expected to remain so for the next four-year period). Required: Determine whether Mozart Ltd or Beethoven Ltd is a parent of Bach Ltd by referring to the concept of control provided by IRS 10 / AASB 10 Consolidated Financial Statements
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