Explain whether q ltd controls n ltd at june

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Reference no: EM132644964

On 27 September 2017, Q Ltd purchased 25 % of the issued ordinary shares of N Ltd. O Unit Trust owns another 22% of the issued ordinary shares of N Ltd. The remaining shares of N Ltd are widely distributed amongst numerous small shareholders, none of whom own more than 2% of N Ltd.

N Ltd's constitution provides that at general meetings of the company, ordinary shareholders are entitled to vote on resolutions and elect directors, on the basis of one vote per ordinary share. Most of the numerous small shareholders in N Ltd do not exercise their right to attend general meetings and vote.

On 6 March 2020 Q Ltd purchased 50% of the issued units of O Unit Trust, thereby obtaining control of O Unit Trust. Q Ltd's financial year ends on 30 June each year.

Required:

Problem 1: Explain whether Q Ltd controls N Ltd at 30 June 2020, in accordance with the requirements of AASB10: Consolidated Financial Statements.

Reference no: EM132644964

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