Case Study 11: Parent-subsidiary relationship (AASB10)
Chip Ltd has 37% of the voting interest in Dale Ltd. An investment bank with which Chip Ltd has business relationships holds a 15% voting interest in Dale Ltd. Because of the closeness of the business relationship with the bank, Chip Ltd believes it can rely on the bank’s support to ensure it cannot be outvoted at general meetings of Dale Ltd. However, there is no guarantee that the bank will always support Chip Ltd.
Required
Discuss whether Chip Ltd is a parent of Dale Ltd.
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