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Accounting treatment for the investment in matrix bhd

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Reference no: EM133205815

a. Radiant Age Berhad acquired 30% of the ordinary shares of Glitter Berhad on 1 January 2022. Radiant Age Berhad holds a substantive option to acquire another 25% of the ordinary shares of Glitter Berhad, but the option can only be exercised in 40 days (12 February 2022).

Discuss when Radiant Age Berhad controlled Glitter Berhad.

b. On 1 January 2021, Venus Bhd acquired 30,000 out of 100,000 ordinary shares of Pluto Bhd. With these interests, Venus Bhd has the power to participate in the financial and operating policy decisions of Pluto Bhd. During the year, Pluto Bhd lent Venus Bhd RM30,000, charging interest rate at 5% per year.

Explain the accounting treatment of the loan from Pluto in the Consolidated Financial Statements of Venus Bhd for the year ended 31 December 2021.

c. On 1 January 2021, Prestige Bhd purchased 100,000 of the 400,000 ordinary shares of Matrix Bhd for a cash consideration of RM15 million. As of 31 December 2021, the investment in Matrix Bhd is impaired by RM5,000.

Explain the accounting treatment for the investment in Matrix Bhd under the equity method.

Reference no: EM133205815

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