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The Directors of Brisbane Ltd (a listed company) have come to your accounting firm to seek advice on how to account for the investments they
The Directors of Brisbane Ltd (a listed company) have come to your accounting firm to seek advice on how to account for the investments they have in the five (5) entities-- Canberra Ltd, Sydney Ltd, Melbourne Ltd, Adelaide Ltd and Perth Ltd. All shares issued by each of the entities are ordinary shares with normal voting rights. All key facts as known to the company are provided below:
Canberra Ltd
| Sydney Ltd
|
Melbourne Ltd
| Adelaide Ltd
|
Perth Ltd
|
|
Given the information above, the directors of Brisbane Ltd would particularly like to know:
- the type of investment for each entity (i.e. you need to clearly identify the investor-investee relationship) including a summary of the identifying criteria and an application of this criterion;
- the accounting method to be adopted for this type of investment
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