Question
At the end of 2024, GreenSolutions Ltd, with one subsidiary, had a holding representing 21% of the equity of Aqua Ltd, a water purification technology
At the end of 2024, GreenSolutions Ltd, with one subsidiary, had a holding representing 21% of the equity of Aqua Ltd, a water purification technology company. It had cost $85,000 when purchased at the start of 2023. At the time of that investment, Aqua Ltd had net assets of $750,000 which increased to $1,100,000 by the end of that year. At the start of the current year, the investment was increased by a further 14% of the equity at a cost of $130,000.
(a) How would the investment be shown in the financial statements if it were treated as a trade investment? (b) How would the investment be shown in the financial statements if it were treated as an associated undertaking? (c) Discuss the strategic alignment of GreenSolutions Ltd's investment in Aqua Ltd with its sustainability goals.
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