BHC Berhad is the parent of a listed group of companies which have a year end of 30 June 2021. Banana has made a number

[answerhappygod]

BHC Berhad is the parent of a listed group of companies
which have a year end of 30 June 2021. Banana has made a number of
acquisitions and disposals of investments during the current
financial year and the directors require advice as to the correct
accounting treatment of these acquisitions and disposals.
a. BHC had purchased a 40% equity interest in PZ for RM18
million a number of years ago when the fair value of the
identifiable net assets was RM44 million. Since acquisition,
BHC had the right to appoint one of the five directors on the
board of PZ. The investment has always been equity accounted for in
the consolidated financial statements of BHC. BHC disposed of
75% of its 40% investment on 1 October 2021 for RM19 million when
the fair values of the identifiable net assets of PZ were RM50
million. At that date, BHC lost its right to appoint one
director to the board. BHC has stated that they have no
intention to sell their remaining shares in PZ and wish to
classify the remaining 10% interest as fair value through other
comprehensive income in accordance with MFRS 9 Financial
Instruments.
Required:
Explain whether equity accounting was the appropriate treatment for
PZ in the consolidated financial statements up to the date of
its disposal. (6 marks)