S Ltd and T Ltd were incorporated in Singapore in January 20x8. They adopt Singapore Financial Reporting Standards and present yearly financial statements with 31 December year- end.

S Ltd acquired 50% interest in T Ltd on 31 December 20x8.

The financial statements of S Ltd and T Ltd for the year 20x8 are as follows:

Assume that S Ltd is permitted to account for T Ltd either as a subsidiary or as an associate. The management of S Ltd is seeking your view as to whether it is more advantageous from the viewpoint of accounting consequences to account for T Ltd as a subsidiary or as an associate.

Required:

Prepare a report to advise the management of S Ltd whether T Ltd should be accounted for as a subsidiary or as an associate, from the viewpoint of accounting consequences. Support your advice with S Ltd's 20x8 consolidated statement of financial position (where T Ltd is accounted for as a subsidiary), and S Ltd's 20x8 statement of financial position (where T Ltd is accounted for as an associate) and the related financial analysis. (Consolidation journal entries and worksheets are not required.