Blade Bhd acquired 75 percent of the ordinary issued share capital of Damia Bhd on 1 January 2018. Subsequently on 1 July 2019, Blade Bhd acquired a further 10 percent of the issued shares of Damia Bhd.

Required:

i) Discuss the impact of the increase in the controlling interest on the relationship between Blade Bhd and Damia Bhd.

(2 marks)

ii) Based on the above scenario, explain the accounting treatment for the investment in Damia Bhd when Blade Bhd prepares its consolidated financial statements for the year ended 31 December 2019.

(5 marks)

c. Radiant Bhd acquired 60% ordinary shares of Glitter Bhd on 1 January 2019. Kangaro Bhd owned 40% of the ordinary shares of Glitter Bhd as well as an option to acquire half of Radiant Bhds shares in Glitter Bhd. The option is currently exercisable at any time and if exercised, would increase Kangaro Bhds votes in Glitter Bhd to 70% and would dilute Radiant Bhds holding to 30% of Glitter Bhd.

Required:

Discuss whether Radiant Bhd controls Glitter Bhd based on MFRS 10 Consolidated Financial Statements.