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Eliminating the investment in B Ltd and recognising goodwill on acquisition date

20% Non-
A Ltd's 80% controlling
B Ltd interest interest
Fair value of consideration transferred 1,000,000

Fair value of identifiable net assets acquired:


Share capital on acquisition date 750,000 600,000 150,000
Retained profits on acquisition date 350,000 280,000 70,000
1,100,000 880,000

Goodwill on acquisition/(gain on bargain purchase) 120,000


Non-controlling interest at date of acquisition 220,000

Parent interest
Non-controlling interest

396804650.xlsx
Debit Credit
$ $
a. Acquisition elimination
share capital 600,000
retained profts 01 july 20X1 280,000
goodwill 120,000
investment in B 1,000,000

b. Goodwill Impairment
retained profits 1 july 20x2 6,000
goodwill impairment loss 6,000
accum impairment losses 12,000

c. Elimination of interim dividend paid


dividend revenue 32,000 (80% of 40,000)
interim dividend paid 32,000

d. Elimination of inter-entity interest internal transfer - intra group


interest revenue (other operating revenue) 10,000
interest expense (other operating expense) 10,000 (look in worksheet for correct a

e. Elimination of inter-entity management fees


other operating revenue 5,000 look at acc. Names !
other operating expenses 5,000

1,059,000 1,059,000

396804650.xlsx
(80% of 40,000)

internal transfer - intra group

(look in worksheet for correct account names)

look at acc. Names !

396804650.xlsx
Direct Non-controlling Interest 0.20

NON-CONTROLLING INTEREST CALCULATIONS


20% Non-
B Ltd $ controlling
interest $
i. Non-controlling interests on acquisition date
Share capital 750,000 150,000
Retained earnings at acquisition 350,000 70,000
1,100,000 220,000
(calc in acquisiton - confirm)

Non-controlling interest in movements in share capital and reserves between the date of
ii.
the parent entity's acquisition and the beginning of the current reporting period

a. Share capital
Share capital at acquisition 750,000
Share capital at beginning of current period 750,000
Movement 0 0
b. Retained profits
Retained profits at acquisition 350,000
Retained profits at beginning of current period 400,000
50,000
Add/subtract adjustments

Movement 50,000 10,000


c Reserve at acquisition
Reserve at beginning of current period 0 no movement in worksheet
Movement 0 0

Non-controlling interest in the current period's profit and movements in reserves in the
iii
current period

a Operating profit

Operating profit after tax 50,000

Add/subtract adjustments

Profit contributed to the economic entity 50,000 10,000

b Dividends
Dividends paid 40,000
Dividends proposed
40,000 8,000
c Transfers to or from reserves
No transfers this period
0 0
Debit Credit
$ $

f Non-controlling interests at acquisition date


share capital 150,000
retained profits -1 july 20x1 70,000
non-controlling interest 220,000

Non-controlling interests in movements in retained profits between the date


g of the parent entity's acquisition and the beginning of the current period
retained profits - 01 july 20x2 10,000
non-controlling interest 10,000

Non-controlling interests in the current period's profit and movements in


h reserves in the current period
non-controlling interest share in profit or loss 10,000
non-controlling interest 10,000

i Non-controlling interests in dividends paid or proposed


non-controlling interest 8,000
dividends paid 8,000

248,000 248,000
CONSOLIDATED WORKSHEET

Eliminations/Adjustments NCI
Account A Ltd B Ltd Debit Credit Group Debit Credit Parent
Income Statement
Sales revenue 400 100 500 500
Cost of sales 100 40 140 140
Other Operating expenses 60 30 c 6 10 d 81 81
5 e
Other Operating revenue 70 20 c 32 43 43
d 10
e 5
Operating profit after tax 310 50 322 h 10 312

Retained Profits - beginning 1,000 400 a 280 1,114 f 70 1,034


c 6 g 10
1,310 450 1,436 1,346
less Dividends paid 200 40 32 c 208 8 i 200

Retained Profits - end 1,110 410 1,228 1,146

Balance Sheet
Shareholders’ equity
Retained earnings 1,110 410 1,228 1,146
Share capital 4,000 750 a 600 4,150 f 150 4,000

Total equity: Parent 5,146


Total equity: Non-controlling interest i 8 220 f 232
10 g
10 h
Current liabilities
Accounts payable 60 40 100 100
Non-current liabilities
Loan 600 100 700 700
5,770 1,300 6,178 6,178

396804650.xlsx
Current assets
Cash 150 15 165 165
Accounts receivable 250 100 350 350
Inventory 500 150 650 650
Non current assets
Land 2,400 535 2,935 2,935
Plant 1,470 500 1,970 1,970
Investment in B Ltd 1,000 1,000 a 0 0
Goodwill a 120 108 108
Accumulated impairment 12 b
Less: Accumulated impairment l 5,770 1,300 1,059 1,059 6,178 248 248 6,178

396804650.xlsx
no movement ofshare captal over 2 years

figure 29.3 - from slides as we now have everything to complete it


can do figure 29.1 also

396804650.xlsx
Consolidated Statement of Comprehensive Income
of A Ltd and its subsidiaries
for the year ended 30 June 20X3
The Group
Notes $000
Sales revenue 500
Cost of sales 140
Gross profit 360

Other Operating revenue 43

43
403
Other Operating expenses 81

81
Profit before income tax expense 322
Income tax expense
Profit after income tax expense 322
Other comprehensive income

Total comprehensive income 322

Profit after income tax attributable to:


Owners of the parent 312
Non-controlling interest 10
322
Total comprehensive income attributable to:
Owners of the parent 312
Non-controlling interest 10
322

Note: This is a working document from which the correctly formatted financial statements would be prepared

396804650.xlsx
Consolidated Statement of Financial Position
of A Ltd and its subsidiaries
as at 30 June 20X3
The Group
Notes $000
Current assets
Cash 165
Accounts receivable 350
Inventory 650
Total Current Assets 1,165

Non current assets


Land 2,935
Plant 1,970
Investment in B Ltd 0
Goodwill 108
Accumulated impairment 0
Total Non Current Assets 5,013
Total Assets 6,178

Current liabilities
Accounts payable 100
Total Current Liabilities 100

Non-current liabilities
Loan 700
Total Non Current Liabilities 700
Total Liaiblities 800

Net Assets 5,378

Shareholders’ equity
Share capital 4,000
Retained earnings 1,146
Reserves
Total parent entity interest in equity 5,146
Non-controlling interest in equity 232
Total Shareholders' Equity 5,378

Note: This is a working document from which the correctly formatted financial statements would be prepared

396804650.xlsx
Consolidated Statement of Changes in Equity
of A Ltd and its subsidiaries
for the year ended 30 June 20X3
Attributable to owners of the parent
Non-
Share General Retained controlling
capital reserve profits Total interest Total equity
$000 $000 $000 $000 $000 $000
Balance at 1 July 20X2 4,000 0 1,034 5,034 230 5,264
Total comprehensive income for the year 312 312 10 322
Dividends (200) (200) (8) (208)
Transfer to general reserve
Balance at 30 June 20X3 4,000 0 1,146 5,146 232 5,378

Note: This is a working document from which the correctly formatted financial statements would be prepared