On 1 August 2020, Clinto acquired 35% of the voting equity shares of Wanzam and 70% of the bonds issued by Wanzam. Clinto also held call options that were exercisable at any time at the fair value of the underlying shares and which, if exercised, would give it additional 10 % of the voting rights in Wanzam. Six of the nine directors of Wanzam are appointed by Clinto. Clinto is responsible for making decisions about the production levels, selling price and profit margins of Wanzam. The governing document of Wanzam states that all the major decisions relating to production levels, selling price and profit margins of Wanzam can be over-ruled by shareholders holding 70% of the voting rights of Wanzam . Trumpian, a competitor of Clinto held 34% percent of the voting shares of Wanzam. Trumpian is responsible for appointing the Administrative Offers of Wanzam and two of the nine directors of Wanzam. Trumpian had an agreement with shareholders holding 21% of Wanzam’s shares to vote on their behalf at annual general meetings of Wanzam. In addition to its investments in Wanzam, Clinto held controlling interests in two other entities and a 21% equity interest in Bush Ltd. Clinto was not represented on Bush Ltd’s Board and did not have any influence in the company’s decision making. The directors of Clinto are uncertain about how its investments in the investees should be accounted for in the financial statements for the year ended December 2020.

Required

Discuss how Clintos’ investments should be accounted for in the financial statements of the company for the year ended 31 December 2020.