Question: On 1 July 2 0 2 1 , Lessi Ltd acquired 7 5 0 0 ordinary shares in More Ltd for R 2 8 5

1

July

2021,

Lessi Ltd acquired

7 500

ordinary shares in More Ltd for R

28 513 .

The retained earnings of More Ltd amounted to R

33 600

1

July

2021 .

On the same day, less Ltd also acquired

5 000

call options in More Ltd

.

The exercise of each call option entitles Lessi Ltd to one ordinary share, the call options are exercisable at any time.Lessi Ltd exercises significant influence over the management and financial policies of More Ltd since

1

July

2021 .

11)

Explain why Lessi Ltd exercises significant influence over More Ltd

.

In your explanation, refer to the definition of significant influence in terms of lAS

28

Investment in associates and joint ventures.

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