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    Winchester Plc acquired the shares of Luca watches, an Italian company, on 1 July 20X5. According to the terms of the acquisition, Winchester Plc would own 75% of Luca's shares at a cost of EUR300 million. Luca Watches retained earnings as on the date of the acquisition were EUR200 million.

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    Winchester Plc acquired the shares of Luca watches, an Italian company, on 1 July 20X5. According to the terms of the acquisition, Winchester Plc would own 75% of Luca's shares at a cost of EUR300 million. Luca Watches retained earnings as on the date of the acquisition were EUR200 million.

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    22 views1 page

    1 Ifrs Case Study Forex Cfs

    Uploaded by

    mona kathuria
    Winchester Plc acquired the shares of Luca watches, an Italian company, on 1 July 20X5. According to the terms of the acquisition, Winchester Plc would own 75% of Luca's shares at a cost of EUR300 million. Luca Watches retained earnings as on the date of the acquisition were EUR200 million.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PDF, TXT or read online from Scribd
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    Winchester Plc, a British Electronics company, acquired the shares of Luca Watches, an Italian company, on 1

    July 20X5. The financial statements of the two companies are as follows:

    Statement of financial position as on 30 June 20X6

    Winchester Plc Luca Watches


    £ million € million
    Tangible assets 742.5 365
    Investment in Luca Watches 187.5 -
    Current assets 960 255
    Total 1,890 620

    Share capital 278 80


    Share premium 125 50
    Retained earnings 900 237.5
    Non-current liabilities 75 102.5
    Current liabilities 512 150
    Total 1,890 620

    According to the terms of the acquisition, Winchester Plc would own 75% of Luca’s shares at a cost of €300
    million. Winchester Plc would give Luca Watches autonomy when running its operations. The value of Luca’s
    retained earnings as on the date of the acquisition was €200 million while the fair value of Luca’s net assets as
    on the same date was the same as their carrying values.

    To view the entire case study Register online at www.gtgifrs.com

    © GTG www.gtgifrs.com

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