Example 3 P acquired 100% of the share capital of S on 1 January 2005 for $60,000.

On 1 January 2005,
the retained earnings of S were $15,000 and the fair value of the non-current assets was $9,000 more
than the carrying value. At 31 December 2009 the companies’ Statements of Financial Position were as
follows:

P S

Non-current assets 82,000 27,000

Investment in S, at cost 60,000

Current assets 20,000 12,000

162,000 39,000

Share capital - $1 shares 50,000 10,000

Retained earnings 110,000 28,000

Current liabilities 2,000 1,000

162,000 39,000

Prepare a Consolidated Statement of Financial Position as at 31 December 2009 for the P group.