Vdocuments - MX - Chapter 5 578590693cc3a PDF

CHAPTER 5
IFRS 10 CONSOLIDATION OF PARENT AND SUBSIDIARY

DEFINITIONS
Consolidated financial statements are the financial statements of a group presented as those of a
single economic entity.
A group is a parent and all its subsidiaries
A parent is an entity that has one or more subsidiaries.
A subsidiary is an entity, including an unincorporated entity such as a partnership that is controlled by
another entity (known as the parent).
Investment entity an entity that: -
a) Obtains funds from one or more investors for the purpose of providing investors with investment
management services.
b) Commits to its investors that its business is to invest funds solely for returns from capital
appreciation, investment income or both, and
c) Measures and evaluates the performance of substantially all of its investments on a fair value
basis.
SCOPE
A parent, other than a parent exempt under this IAS, shall present consolidated financial statements in
which it consolidates its investments in subsidiaries in accordance with this Standard.
A parent need not present consolidated financial statements if and only if:
(a) the parent is itself a wholly-owned subsidiary, or is a partially-owned subsidiary of another entity
and its other owners, including those not otherwise entitled to vote, have been informed about,
and do not object to, the parent not presenting consolidated financial statements;
(b) the parent’s debt or equity instruments are not traded in a public market (a domestic or foreign
stock exchange or an over-the-counter market, including local and regional markets);
(c) the parent did not file, nor is it in the process of filing, its financial statements with a securities
commission or other regulatory organization for the purpose of issuing any class of instruments in
a public market; and
(d) the ultimate or any intermediate parent of the parent produces consolidated financial
statements available for public use that comply with International Financial Reporting Standards.
An entity is not required to consolidate it post employment benefit plans or other long-term employee
benefit plans to which IAS 19 applies.
An investment entity shall not consolidate its subsidiaries or apply IFRS 3, instead measure these
investments at fair value through profit or loss account.
CONSOLIDATION PROCEDURES
Consolidated financial statements:
(a) combine like items of assets, liabilities, equity, income, expenses and cash flows of the parent
with those of its subsidiaries.
(b) offset (eliminate) the carrying amount of the parent’s investment in each subsidiary and the
parent’s portion of equity of each subsidiary (IFRS 3 explains how to account for any related
goodwill).
(c) eliminate in full intra-group assets and liabilities, equity, income, expenses and cash flows relating
to transactions between entities of the group (profits or losses resulting from intra-group
transactions that are recognized in assets, such as inventory and fixed assets, are eliminated in
full). Intra-group losses may indicate an impairment that requires recognition in the consolidated
financial statements. IAS 12 Income Taxes applies to temporary differences that arise from the
elimination of profits and losses resulting from intra-group transactions.
Uniform accounting policies
If a member of the group uses accounting policies other than those adopted in the consolidated
financial statements for like transactions and events in similar circumstances, appropriate adjustments
are made to that group member’s financial statements in preparing the consolidated financial
statements to ensure conformity with the group’s accounting policies.
Page 1 of 43
Measurement of Assets and Liabilities and related Incomes and Expenses
An entity includes the income and expenses of a subsidiary in the consolidated financial statements
from the date it gains control until the date when the entity ceases to control the subsidiary. Income
and expenses of the subsidiary are based on the amounts of the assets and liabilities recognized in the
consolidated financial statements at the acquisition date.
For example, depreciation expense recognized in the consolidated statement of comprehensive
income after the acquisition date is based on the fair values of the related depreciable assets
recognized in the consolidated financial statements at the acquisition date.
Potential voting rights
When potential voting rights, or other derivatives containing potential voting rights, exist, the proportion
of profit or loss and changes in equity allocated to the parent and non-controlling interests in preparing
consolidated financial statements is determined solely on the basis of existing ownership interests and
does not reflect the possible exercise or conversion of potential voting rights and other derivatives,
unless paragraph B90 applies.
In some circumstances an entity has, in substance, an existing ownership interest as a result of a
transaction that currently gives the entity access to the returns associated with an ownership interest. In
such circumstances, the proportion allocated to the parent and non-controlling interests in preparing
consolidated financial statements is determined by taking into account the eventual exercise of those
potential voting rights and other derivatives that currently give the entity access to the returns.
Reporting date
The financial statements of the parent and its subsidiaries used in the preparation of the consolidated
financial statements shall have the same reporting date. When the end of the reporting period of the
parent is different from that of a subsidiary, the subsidiary prepares, for consolidation purposes,
additional financial information as of the same date as the financial statements of the parent to enable
the parent to consolidate the financial information of the subsidiary, unless it is impracticable to do so.
If it is impracticable to do so, the parent shall consolidate the financial information of the subsidiary
using the most recent financial statements of the subsidiary adjusted for the effects of significant
transactions or events that occur between the date of those financial statements and the date of the
consolidated financial statements. In any case, the difference between the date of the subsidiary’s
financial statements and that of the consolidated financial statements shall be no more than three
months, and the length of the reporting periods and any difference between the dates of the financial
statements shall be the same from period to period.
Non-controlling interests
An entity shall attribute the profit or loss and each component of other comprehensive income to the
owners of the parent and to the non-controlling interests. The entity shall also attribute total -
comprehensive income to the owners of the parent and to the non-controlling interests even if this
results in the non-controlling interests having a deficit balance.
If a subsidiary has outstanding cumulative preference shares that are classified as equity and are held
by non-controlling interests, the entity shall compute its share of profit or loss after adjusting for the
dividends on such shares, whether or not such dividends have been declared.
CONSOLIDATION PROCEDURE ILLUSTRATED
• Group has no books of account as a whole:
• Parent has its own books of accounts
• Subsidiary has its own books of accounts
• Each company prepares their own Financial Statements
In consolidation, we add up the financial statements of both companies
Reasons for consolidation:
⇒ Parent company controls the subsidiary hence they decide the subsidiary’s policies (stewardship
efficiencies, and inefficiencies)
⇒ Sales of financial instruments to ‘special purpose entities’ (IAS-39) e.g. factoring, assignment etc
⇒ Related party relationship may affect the financial statements of individual entities.
⇒ Decision to invest in group requires the detail of the performance of group as a whole.
METHOD OF CONSOLIDATION
Purchase method is based on the concept of single economic entity.
Single economic entity results in elimination of:
Page 2 of 43
⇒ Investment in subsidiary shown in parent company Financial Statements
⇒ Share Capital of subsidiary

⇒ Intra group balances – payables and receivables
⇒ Loans and advances between parent and subsidiary
⇒ Intra group trading – sale and purchase
⇒ Gain on Sale and purchase of fixed assets and inventory (opening and closing both), however,
losses on sale or purchase are assumed to be impairment losses and need not be eliminated.
⇒ Interest and dividend from S Co
⇒ The resultant deferred tax arising on temporary differences because of elimination of profits /
gains on intra-group transactions will be recognized.
⇒ The consolidated financial statements will be prepared using same accounting policies for like
transactions.
⇒ The purchase method of accounting has the following steps: -
Determination of cost IFRS – 3 Date of Calculation of goodwill

Group Goodwill
of investment acquisition accounting at date of acquisition
Determination of Fair Determination of value

Identification of date of
value of net assets of of NCI at date of Full goodwill
acquisition
subsidiary company acquisition, if partially
owned subsidiary
NCI is recognized at
Fair Value
NCI is recognized at
proportionate share of
net assets
DEALING WITH THE STATEMENT OF FINANCIAL POSITION
Consolidation Procedures for Basic Consolidation
1. Prepare the following working notes:
⇒ Working Note 1 for group structure, identification of percentage holding by the parent
company
⇒ Working Note 2 for cost of control (to calculate goodwill only group share of Goodwill)
⇒ Working Note 3 for Non-controlling Interest (if applicable i.e. where the holding by the parent
is less than 100% but more than 50% in subsidiary company)
⇒ Working Note 4 for Subsidiary Reserves by identifying Pre and Post acquisition reserves
⇒ Working Note 5 for Consolidated Reserves
Note separate working should be prepared for each reserve of subsidiary and parent
because similar reserve will be added with similar reserve.
2. Add all non-adjusting items line by line except cost of investment appearing in P. Co and share
capital of S. Co.
3. Make all necessary adjustments discussed on next pages.
4. Balance all working accounts and place the balances in the statement of financial position
1. Investment in subsidiary company
This balance is eliminated from statement of financial position and incorporated in the
calculation of goodwill.
Page 3 of 43
Entry:
Debit: Cost of control account
Credit: Investment in subsidiary
2. Share capital of subsidiary company
3. Subsidiary company reserves

First split reserves into post and pre acquisition reserves because both have different treatment,
and also before the following entries, make necessary adjustments to the both types of reserve.
Example 1 Acquisition of wholly owned subsidiary

On 31st December 20X1 P purchased the entire share capital of S for Rs. 40,000. The individual
statements of financial positions of P and S at that date were as follows: -
Statement of financial positions at 31 December 20X1
P S
Rs.000 Rs.000
Non-current assets 120 40
Investment in S at cost 40 -
Current assets 40 10
Total assets 200 50
Ordinary share capital (Rs.1 shares) 100 30
Retained earnings 50 10
Current liabilities 50 10
Total equity and liabilities 200 50
Required: Prepare consolidated statement of financial position as at December 31, 20X1?
Page 4 of 43
Example-2 Reserves (Pre-acquisition and post acquisition)
P S
Rs.000 Rs.000
Total assets 150 80
You are further informed that P acquired all the shares in S on 30 June 20X4 when the retained
earnings of S amounted to Rs.15,000.
4 Treatment of impairment loss on goodwill
Example 3
Non-controlling interest
P S
Rs.000 Rs.000
Total assets 150 80
Required: -
P acquired 40,000 Rs.1 shares in S on 30 June 20X4 for Rs.70,000, when the retained earnings of S
amounted to Rs.15,000. The group has a policy of measuring non-controlling interest at
proportionate share of net assets at the date of acquisition. 20% of goodwill has impaired to
date?
4. Fair values adjustments of subsidiary company assets/liabilities
If fair value differs at the date of acquisition and if not incorporated in group financial
statements then goodwill may include certain gains/losses of identifiable assets, which is not
permitted by definitions of goodwill as well as by IFRS – 3. The following is treatment of fair value
adjustments arising at the date of acquisition.
Page 5 of 43
Example 4
The summarized draft statement of financial positions of the companies in a group at 31 December
20X4 were
P S P S
Rs. Rs. Rs. Rs.
Sundry assets 86,000 24,500 Share capital (Rs.1 Ord.). 100,000 20,000
Investment in S (shares at cost) 27,000 - Retained earnings 22,000 6,500
Inventory 20,000 10,000 Payables 11,000 8,000
133,000 34,500 133,000 34,500
Prepare the consolidated statement of financial position at 31 December 20X4 for each of the following
alternatives.
a) P acquired all the shares in S on 1 January 20X4, when S had accumulated profits of Rs.6,000.
b) Facts as in (a) above, except that only 16,000 ordinary shares in S were purchased for Rs.27,000
c) Facts as in (a) above, except that only 16,000 ordinary shares in S were purchased for Rs.27,000
on 1 January 20X4. The subsidiary has not incorporated the fair values in its separate books and
fair value adjustments identified by the parent company at the date of acquisition are as
follows: -
Carrying value Fair value Exist on subsequent
Page 6 of 43
Rs. Rs. Reporting date
Property (Non-Depreciable) 10,000 12,000 Yes
Inventory 6,000 4,500 NO
The group has a policy of measuring non-controlling interest at proportionate share of net assets at the
date of acquisition. 20% of goodwill has impaired to date.
5 Intra group balances
Example 5
Statements of financial position at 31 December 20X4
P S
Rs. Rs.
Investment in S (at cost) 19,000 --
S current account 10,000 --
Cash at bank 20,000 28,000
Other sundry assets 41,000 16,000
Total assets 90,000 44,000
Share capital (Rs.1 Ord.) 50,000 10,000
Retained earnings 30,000 20,000
Current liabilities 10,000 5,000
P current account -- 9,000
Total equity and liabilities 90,000 44,000
1 P bought 7,500 shares in S on 1 January 20X4 when the balance on the retained earnings of S
was Rs.12,000.
Page 7 of 43
2 The current account difference has arisen as a cheque of Rs. 500 sent by S to P on 30 December
20X4 was not received by P until 3 January 20X5, Rs. 300 purchases by S from P wrongly credited
to some other creditor account and Rs. 200 charged by P for certain expenses paid on behalf of
S.
3 No stock related to intercompany purchases exists at the reporting date.
4 The P Group has the policy of measuring non-controlling interest at fair value (FV) and FV of NCI
was Rs. 6,000 at the date of acquisition.
5 Goodwill of Rs. 1,000 has been impaired to date
Prepare the consolidated statement of financial position at 31 December 20X4?
5. Investment in Preference shares / loans
Example 6
Maximum acquired 90,000 Rs.1 ordinary shares, 50,000 Rs.1 preference shares and Rs.10,000 loan notes
in Minimum on 30 June 20X1.
The balance in the books of Maximum and Minimum as at 31 December 20X4 were as follows:
Maximum Minimum
Rs. Rs.
Non-current assets, at cost less depreciation 380,000 225,000
90,000 ordinary shares in Minimum, at cost 185,000 -
50,000 preference shares in Minimum, at cost 55,000 -
Rs.10,000 loan notes in Minimum 10,000 -
Current assets 200,000 143,500
Total assets 830,000 368,500
Ordinary shares of Rs.1 500,000 120,000
8% non-cumulative preference shares of Rs.1 - 80,000
7% loan notes - 40,000
Revaluation reserve 50,000 30,000
Payables 130,000 32,500
You are also given the following information:
Page 8 of 43
a) The revaluation reserve and retained earnings of Minimum as at 30 June 20X1 were Rs.12,000
and Rs.30,500 respectively.
b) The inventory of Minimum at 31 December 20X4 includes Rs.22,800 in respect of goods
purchased from Maximum. Maximum invoices Minimum at cost plus 20%.
c) Minimum owed Rs. 5,000 to Maximum included in its payables, which also agree with the
receivable balance in Maximum books.
d) Maximum has the policy of measuring NCI at proportionate share of net assets at the date of
acquisition.
e) The whole amount of goodwill has impaired by the current reporting date.
You are required to prepare the consolidated statement of financial position of Maximum and its
subsidiary Minimum as at 31 December 20X4.
6. Intra group trading and resultant stocks at the reporting date
Note: It may be possible that an item may be inventory for one entity and fixed asset for other entity
e.g. an item of inventory sold by parent company but recognized by subsidiary company as property,
plant and equipment. If this is the case then pass following adjusting entries while preparing
consolidated financial statements.
Debit Credit
Sales X (with sale price)
Cost of sales X (cost to the seller)
Property, plant and X (Profit margin)
equipment
In other words it is just goods taken by an entity from inventory for use in the business.
Example-7
Intra-group profits on stocks
P S
Rs. Rs.
Investment in S (at cost) 75,000
Inventory 12,000 5,000
P current account 5,000
Other assets 83,000 90,000
Total assets 170,000 100,000
Page 9 of 43
Share capital (Rs. 1 ord.). 50,000 40,000
Trade payables 20,000 5,000
1 P acquired 32,000 shares in S on 1 January 20X4 when the balance on the retained earnings of
S was Rs.50,000.
2 During the year S sold goods to P for Rs.80,000 making a standard mark up of 25%. At 31
December 20X4, P included in its inventory value Rs.5,000, being the price paid for goods
purchased from S.
3 Other than the goods in note no. 2 Rs. 5,000 goods are in transit not received by P till the
reporting date.
4 Except the goods in transit P has paid for the due amount to S before the year end.
Prepare the consolidated statement of financial position as at 31 December 20X4?
7 Dividends from subsidiary companies
a) Dividend Payable from subsidiary company and Dividend Receivable in parent company are
treated as intra-group balance.
b) Any amount of dividend payable to NCI is included in NCI.
c) If the dividend declared is greater than post-acquisition profit, then it was declared out of pre-
acquisition profits.
Possible situations:
1. Dividend declared / paid by subsidiary company and duly recorded by both companies.
Do nothing in group financial statements
2. Dividend declared by subsidiary company and no recording by both companies
Parent company Subsidiary company
Debit: Dividend Receivable Debit: SRE (Pre or Post)
Credit: CRE or P&L Credit: Dividend Payable
The dividend payable and receivable balances are cancelled.
3. Dividend declared by subsidiary company and no recording in parent’s accounts
Parent company
Debit: Dividend Receivable
Credit: CRE or P&L
The dividend payable and receivable balances are cancelled.
4. Dividend declared / paid by subsidiary and no recording in parent company
Parent company
Debit: Dividend Receivable
Credit: CRE or P&L
Debit: Cash in Transit
Page 10 of 43
Credit: Dividend Receivable
5. Dividend declared / paid by subsidiary and parent company has only recorded Dividend
Receivable
Parent company
Debit: Cash in Transit
Credit: Dividend Receivable
6. Dividend declared by subsidiary company from Pre-Acquisition profit and parent company
treated that as income.
Adjusting Entry
Debit: CRE or P&L
Credit: Cost of investment
Example 8
Up-minster acquired 80% of the ordinary share capital of Barking several years ago when the balance
on the accumulated profits of Barking was Rs.12,000. Their respective draft statement of financial
positions at 31 December 20X4 are as follows:
Up-minster Barking
Rs. Rs.
Non-current assets 100,000 92,000
Investment in Barking 55,000 -
Total assets 200,000 123,000
Ordinary shares capital 100,000 50,000
Preference share capital - 10,000
Proposed ordinary dividend (declared Dec 20X4) - 10,000
Sundry payables 20,000 11,000
Up-minster has not made any entry for the dividend receivable from Barking for the year. A proposed
preference dividend of Rs.2,000 by Barking (also declared in December 20X4) has not been accounted
for by either company. Up-minster purchased 30% of the preference shares for Rs.3,500 some years ago.
It’s the group policy to measure NCI at proportionate share of FV of net assets at the date of acquisition.
Prepare the consolidated statement of financial position at 31 December 20X4.
7. Intra group sale of fixed assets
Page 11 of 43
Example 9
P S
Rs. Rs.
Other non-current assets 83,000 95,000
170,000 100,000
Share capital (Rs. 1 Ord.). 50,000 40,000

170,000 100,000
a) P acquired 32,000 shares in S on 1 January 20X4 when the balance on the retained earnings of S
was Rs.50,000.
b) During the year S sold fixed assets to P for Rs.2,000 having a book value of Rs. 1,500. P & S both
charge depreciation @ 20% on such assets. Asset still exist in the books of P.
c) The group has a policy of measuring NCI at proportionate share of FV of net assets at the date
of acquisition.
d) There has been no impairment loss on goodwill till now.
Required: - Prepare the consolidated statement of financial position at 31 December 20X4?
8. Fair value adjustment of depreciable assets

Page 12 of 43
Example 10
P S
Rs. Rs.
Inventory 12,000 20,000
Other net assets 83,000 80,000
170,000 100,000
Share capital (Rs. 1 Ord.). 50,000 40,000

170,000 100,000
a) P acquired 32,000 shares in S on 1 January 20X1 when the balance on the retained earnings of S
was Rs.10,000.
b) The cost of fixed assets of S on January 01, 20X1 was Rs. 200,000 and accumulated depreciation
of Rs. 40,000. The fair value of these assets was Rs. 220,000 on the date of acquisition. The
company depreciates such type of assets @ 20% on cost. The S has not incorporated the
revalued amount in its separate accounts.
Required: - Prepare the consolidated statement of financial position at 31 December 20X4?
11 Subsidiary acquired during the year
You have to determine pre and post acquisition retained earnings by allocating the profit for the
year according to the information provided. Normally assume that the profit was accrued
evenly over the year.
The dividend paid during the year is also accrued evenly over the year.
Page 13 of 43
Example 11
P acquired 4 million of S equity shares paying Rs. 5.5 each and Rs. 500,000 (at par) of its 10%
redeemable preference shares on June 30, 20X2. At April 01, 20X2 the accumulated retained earnings
of S were Rs. 5,280,000.
Statement of financial positions at 31 March 20X3
P S
Rs. (000) Rs. (000)
Non- current assets
PPE 38,450 22,220
Investment in S
Equity 22,000 --
Preference shares 500 --
60,950 22,220
Current assets
Trade receivables 11,420 3,830
Cash and bank 490 --
21,760 10,420
82,710 32,640
Equity and liabilities
Capital and reserves
Equity capital Rs. 1 each 10,000 5,000
Accumulated profits 52,640 15,280
62,640 20,280
Non-current liabilities
10% loan notes 12,000 4,000
10% redeemable preference capital -- 2,000
12,000 6,000
Current liabilities
Overdraft -- 570
Income taxes 2,470 1,980
8,070 6,360
82,710 32,640
The following information is relevant:
a) Included in PPE of S is a large area of development land at its cost of Rs.5 million. Its fair value at
the date S was acquired was Rs. 7 million and by 31st March 20X3 this had risen to Rs.8.5 million.
The group valuation policy for development land is that it should be carried at fair value and not
depreciated.
b) Also at the date S was acquired, its PPE included plant that had a fair value of Rs. 4 million in
excess of its carrying value. This plant had a remaining life of 5 years. The group calculates
depreciation on straight-line basis. The fair value of S’s other net assets approximates the same.
c) In the post acquisition period S sold goods to P for Rs. 1.8 million. S adds a 20% mark-up on cost
to all its sales Goods with transfer price of Rs. 450,000 were included in P’s inventory at 31st March
20X3.
d) The balances on the current accounts of the parent and subsidiary were Rs. 240,000 on 31st
March 20X3.
e) The group has the policy of measuring NCI at FV at the date of acquisition. The MV of S
company shares at the date of acquisition was Rs. 4.90 per share.
f) Consolidated goodwill is subjected to an annual impairment review; the recoverable value of
Net Assets of S is Rs. 28 million at the current reporting date.
Required: -
Prepare the consolidated statement of financial position of P group on 31st March 20X3.
Page 14 of 43
12 Expenses on acquisition
13 Other Fair Value Adjustments
Example 12
M/S Haseeb Limited acquired 75% M/S Saqib Limited on September 30, 2008 for Rs. 12 million by paying
immediately Rs. 10 million to the former owners and agreed to pay the balance amount after one year.
The discount rate Haseeb Limited uses for its present value calculation is 12%. The statements of financial
position for both the companies for the year ended December 31, 2008 is as follows: -
Haseeb Ltd. Saqib Ltd.

(Rs. 000) (Rs. 000)
Investment in Saqib Ltd 10,000 --
Property, plant and equipment 20,000 8,000
45,000 14,000
Share capital 15,000 6,000
Retained earnings b / f 10,000 3,000
Profit for the year 6,000 1,200
31,000 10,200
Current liabilities 14,000 3,800
45,000 14,000
The following further information is also available: -
a) Haseeb Ltd only recorded the investment in Saqib Ltd at the amount of cash paid.
Page 15 of 43
b) The fair value of property, plant and equipment of Saqib Ltd at the date of acquisition was Rs.
1,000,000 more than its carrying value which results in extra depreciation of Rs. 45,000 in the post
acquisition period.
c) In the post acquisition period Saqib Ltd sold goods to Haseeb Ltd charging Rs. 100,000 as margin
on goods. 55% of the goods are still lying with Hasseeb Ltd.
d) All revenues and expenses have accrued evenly through the year.
e) The group has the policy of measuring NCI at the proportionate share of net assets at the date
of acquisition.
f) Saqib Ltd has a popular brand developed over many years in the past but has not been
recognized in its books, a professional firm of valuers placed a value of Rs. 200,000 at the date of
acquisition.
Required: -
a) Goodwill arising on acquisition
b) Consolidated balance sheet of Haseeb Ltd group
c) Statement of changes in equity of Haseeb Ltd Group
CONSOLIDATION OF STATEMENT OF COMPREHENSIVE INCOME
Working 1:
Parent Co- Subsidiary Co- Adjustments Consolidated
Current year Post Acquisition Figures
Sales Xxx Xxx SN1 xxx
Less: cost of sales (xxx) (xxx) SN1-5 (xxx)
Gross profit Xxx Xxx xxx
Selling and distribution (xxx) (xxx) - (xxx)
Administration (xxx) (xxx) SN6 (xxx)
Operating profit (xxx) (xxx)
Dividend Income – from subsidiary xxx (xxx) -
Interest income – from subsidiary xxx (xxx) -
Interest expense (xxx) (xxx) xxx (xxx)
Profit before tax Xxx Xxx (xxx) xxx
Tax expense (xxx) (xxx) (xxx)
Share of profit from associate - - xxx xxx
Non-controlling interest (SN 7) (x) x (xxx)
Profit attributable to group Xxx Xxx (xxx) xxx
Extended Working for the Retained Earnings Extract:
Parent Co- Subsidiary Co- Adjustments Consolidated
Current year Post Acquisition Figures
Profit attributable to group Xxx xxx (xxx)/xxx Xxx
Parent – profit B/F Xx - (xx) Xxx
Subsidiary – Profit B/F xxx SN9 (xxx)/xxx XN9 Xxx
Page 16 of 43
Dividend – (SN10) (xxx) (xx) (xxx)
xxx Xxx Xxx Xxx
C/D Parent C/D Subsidiary Statement of Consolidated

Co RE Co RE FP RE
Adjustments
SN1 – Intra Group Sales Debit: Sales Credit: Cost of

Sales
SN2 – Unrealized Profit on Intra Group Sales Debit: Cost of Credit: Closing
Sales Stock
SN3 – Extra Depreciation on Fair Value adjustment of Debit: Cost of Credit: Asset
depreciable assets of subsidiary Sales
SN4 – Extra Depreciation on Intra Group Sale of Fixed Assets Debit: Asset Credit: Cost of
Sales
SN5 – Gain on disposal on intra group sale of assets Debit: Cost of Credit: Asset
Sales
SN6 – Impairment of goodwill Debit: Cost of Credit: Goodwill
Sales
SN7 – Adjustment Profit and allocate value of NCI

Profit after tax xx
Less: Unrealized Profit on closing stock if subsidiary
company is seller (xx)
Gain on sale of fixed assets if subsidiary
company is seller (xx)
Extra depreciation because of fair value
adjustment of depreciable assets (if fair value
note recorded in S Co. books) (xx)
Add: Extra Depreciation on intra group sale of FA Xx
(S.co is Buyer)
Adjusted Profit Xx
Allocate NCI their share of the - Loss Share Debit: NCI Credit: P&L Note: We are allocating
profit subsidiary’s profit
- Profit share Debit: P&L Credit: NCI
SN8 – Only the group share of brought forward post acquisition profits
SN9 – All prior year adjustment on profit/loss
SN10 – Only the dividend paid out by the parent will appear in the extract
E-1 Highmore acquired 75% of the ordinary shares of Slowmore on that company’s incorporation on
June 01, 2004. The summarized statements of comprehensive income of the two companies for
the year ending May 31, 2009 are set out below:
Highmore Slowmore
Income statement Rs. Rs.
Sales revenue 75,000 38,000
Cost of sales 30,000 20,000
Gross profit 45,000 18,000
Administrative expenses 14,000 8,000
Profit before tax 31,000 10,000
Taxation 10,000 2,000
Profit after tax 21,000 8,000
Other comprehensive income
Gain on AFS financial assets 50,000 30,000
Revaluation surplus during the 100,000 20,000
Page 17 of 43
year
150,000 50,000
Total comprehensive income 171,000 58,000
Required: Prepare consolidated statement of comprehensive income for the year ended May 31, 2009?
E-2 Highmore acquired 80% of the ordinary shares of Slowmore on 1 October2009. The summarized
statements of comprehensive income of the two companies for the year ending 31 December
2009 are set out below. The incomes and expenses have accrued evenly during the year.
Highmore Slowmore
Rs. Rs.
Cost of sales 30,000 36,000
Administrative expenses 14,000 8,000
Taxation 10,000 4,000
Required: Prepare consolidated statement of comprehensive income for the year ended 31 December
2009?
E-3 Highmore acquired 100% of the ordinary shares of Slowmore some year ago. The Statements of
Comprehensive Income for year ending May 31, 2009 are given hereunder: -
Highmore Slowmore
Rs. Rs.
Operating Profit 450 200
Dividend from Slowmore 50 --
Profit before tax 500 200
Taxation 150 80
Profit after tax 350 120
Required: Prepare consolidated statement of comprehensive income for the year ended May 31, 2009?
E-4 Highmore has owned 100% of Slowmore for a number of years. The income statements of the
individual companies are shown below. When Highmore acquired the shares of Slowmore,
Slowmore’s retained earnings were Rs.4,000. Other points are as follows: -
1. Highmore has not accounted for Slowmore’s dividend.
2. Higmore sold goods costing Rs.10,000 to Slowmore for Rs.15,000.
3. At the statement of financial statement date 31 December 2009 20% of goods remained un-sold
by Slowmore.
4. Goodwill has impaired by Rs.2,000 during the current year.
5. Impairment of Good will prior to the year ending 31 December 2009 totaled Rs.10,000.
Statement of comprehensive Income for the year ended 31 December 2009
Highmore Slowmore
Rs. Rs.
Sales revenue 400 280
Cost of sales 270 190
Gross profit 130 90
Distribution expenses 20 10
Administrative expenses 30 15
Taxation 17 11
Retained earnings
Retained earnings brought 11 7
forward
Profit for the year 63 54
74 61
Page 18 of 43
Dividends (40) (30)
Retained earnings carried 34 31
forward
Required: Prepare consolidated statement of comprehensive income and consolidated statement of
changed in equity?
E-5 Highmore acquired80% of Slowmore shears two years ago.
Notes
a.) Slowmore sold goods costing Rs.20,000 to Highmore for Rs.30,000.
b.) At the reporting date 31 December 2009 60% of goods remained unsold.
c.) Highmore has not accounted for Slowmore’s dividends.
d.) At the date of acquisition, Slowmore’s retained earnings were Rs.20,000.
e.) Goodwill has suffered an impairment loss of Rs.5,000 during the current year. The non- controlling
interest is being valued on a proportionate share of net assets basis.
Statement of comprehensive income for the year ended 31 December 2009
Highmore Slowmore
Sales revenue 640 330
Cost of sales 410 200
Gross profit 230 130
Administrative expenses 35 12
Distribution expenses 70 54
Taxation 26 10
Other comprehensive income
Fair value gain on AFS 30 (20)
investments
30 (20)
Total comprehensive income 129 34
Retained earnings brought 29 35
forward
Total comprehensive income 129 34
158 69
Dividends (82) (40)
Retained earnings carried 76 29
forward
Required: Prepare consolidated statement of comprehensive income and show the analysis of retained
earnings in the consolidated statement of changes in Equity.
E-6 Highmore acquired 60% of the ordinary shares of Slowmore. At that time shareholders equity was
Rs. 57,000. No ordinary shares have been issued since that time. Highmore also provided 50%of
Slomore’s loan. The statements of comprehensive income and extract of statements of changes
inequity of the two companies are shown below.
Statement of comprehensive income for year ending 31 December 2009
Highmore Slowmore
Operating profit 100,500 30,000
Investment income from ordinary shares in 3,000
Slowmore
Interest income from Slowmore 2,500 --
Interest expenses (7,000) (5,000)
Taxation (38,000) (10,000)
Statement of changes in equity
Page 19 of 43
Balance brought forward 148,000 63,000
Net profit for the year 61,000 15,000
Dividend – ordinary (10,000) (5,000)
Balance at the end of the year 199,000 73,000
Notes: -
a) At the beginning of the year Highmore sold fixed asset having carrying value of Rs. 5,000 for Rs.
7,000 to Slowmore. The asset was having remaining useful life of five years at the date of sale
and was being depreciated on straight line basis.
b) Slowmore sold goods costing Rs. 10,000 to Highmore at markup of 20%. All the goods remained
unsold by Highmore at the year end.
c) The NCI was measured at fair value at the date of acquisition and goodwill of Rs. 500 has been
impaired in the current year.
d) Slowmore incurred an expense of Rs. 1,000 on developing a new production process and
recognized that as an intangible asset in its separate financial statements. The management of
Highmore has decided to discontinue the further development as the market competition is
strong in this area. Slowmore has not derecognized the expense in its separate financial
statements.
Required: Prepare consolidated statement of comprehensive income and extract from the statement of
changes in Equity for the Highmore group?
E-7 Draft statements of comprehensive income and statements of changes in Equity of Highmore
and its subsidiary Slowmore for the year ended 31 December 2009 are shown below.
Statement of comprehensive income for year ending 31 December 2009
Highmore Slowmore
Rs. Rs.
Cost of sales (158,400) (123,200)
Administrative expenses (54,000) (32,000)
Operating profit 107,200 61,600
Investment income from ordinary shares in Slowmore 9,000
Investment income from preference shares in 1,600
Slowmore
Interest income 2,000 3,000
Profit before taxation 119,800 64,600
Taxation (58,800) (28,600)
Retained earnings brought forward 266,800 107,200
Profit for the year 61,000 36,000
Ordinary dividend (30,000) (20,000)
Preference dividend (12,000) (8,000)
Retained earnings carried forward 285,800 115,200
1. On 1 July 2009 Highmore Acquired 90% of Slowmore ordinary share capital and 40%of its
preference share capital.
2. Slowmore’s cost of sales includes a depreciation charge on some plant and equipment for the
year ending 31 December 2009 of Rs.6,000. At 1 January 2009 this plant and equipment (which
was two years old at that time) had a book value of Rs.18,000. When bought its useful life was 5
years. At the 1 July 2009, the fair value of this plant based on replacement cost was Rs.25,000.
The useful life of plant was unchanged.
3. The Slowmore has not recognized an internally generated brand in its separate financial
statements at the date of acquisition. The fair value of this brand at the date of acquisition was
Rs. 15,000 and expected remaining life of 5 years. The group uses straight line method for
amortizing such brands.
4. Highmore has not provided Slowmore with any of its loan capital.
Page 20 of 43
5. The revenue of Highmore includes Rs.38,000 in respect of goods sold to Slowmore at a price that
yielded a profit of 20 percent on selling price. These sales were made after acquisition. Rs.2,000
of these goods was in the closing inventory of Slowmore.
Required: Prepare consolidated statement of comprehensive income and extract from the statement of
changes in Equity for the Highmore group?
E-8 M/S Haseeb Limited acquired 75% M/S Saqib Limited on September 30, 2008 for Rs. 12 million by
paying immediately Rs. 10 million to the former owners and agreed to pay the balance amount
after one year. The discount rate Haseeb Limited uses for its present value calculation is 12%. The
profit and loss account for both the companies for the year ended December 31, 2008 is as
follows: -
Haseeb Ltd. Saqib Ltd.
(Rs. 000) (Rs. 000)
Revenue 10,000 5,000
Cost of sales (6,500) (4,000)
Operating cost (1,500) (400)
Operating profit 2,000 600
Tax expense (450) (200)
Profit after tax 1,550 400
Statement of changes in equity extract
Retained earnings on January 01, 2008 15,000 7,500
The following further information is also available: -
a) The fair value of property, plant and equipment of Saqib Ltd at the date of acquisition was Rs.
1,000,000 more than its carrying value which results in extra depreciation of Rs. 45,000 in the post
acquisition period.
b) In the post acquisition period Saqib Ltd sold goods to Haseeb Ltd valuing Rs. 250,000 charging
Rs. 100,000 as margin on goods. 55% of the goods are still lying with Hasseeb Ltd.
c) All revenues and expenses have accrued evenly through the year.
d) The impairment loss on goodwill is 25% of the amount determined at the date of acquisition.
Required: -
a) Goodwill arising on acquisition
b) Consolidated Profit and loss account of Haseeb Ltd group
c) Statement of changes in equity of Haseeb Ltd Group
Page 21 of 43
ADDENDUM TO CHAPTER 5
GOODWILL IMPAIRMENT UNDER IAS 36

Introduction
In accordance with IFRS 3 (as revised in 2008), the acquirer measures and recognizes goodwill as of the
acquisition date as the excess of (a) over (b) below:
(a) the aggregate of:
(i) the consideration transferred measured in accordance with IFRS 3, which generally
requires acquisition-date fair value;
(ii) the amount of any non-controlling interest in the acquiree measured in accordance with
IFRS 3; and
(iii) in a business combination achieved in stages, the acquisition-date fair value of the
acquirer’s previously held equity interest in the acquiree.
(b) the net of the acquisition-date amounts of the identifiable assets acquired and liabilities
assumed measured in accordance with IFRS 3.
Allocation of goodwill
IAS 36 requires goodwill acquired in a business combination to be allocated to each of the acquirer’s
cash-generating units, or groups of cash-generating units, expected to benefit from the synergies of the
combination, irrespective of whether other assets or liabilities of the acquiree are assigned to those
units, or groups of units. It is possible that some of the synergies resulting from a business combination will
be allocated to a cash-generating unit in which the non-controlling interest does not have an interest.
Testing for impairment
Testing for impairment involves comparing the recoverable amount of a cash-generating unit with the
carrying amount of the cash-generating unit.
If an entity measures non-controlling interests as its proportionate interest in the net identifiable assets of
a subsidiary at the acquisition date, rather than at fair value, goodwill attributable to non-controlling
interests is included in the recoverable amount of the related cash-generating unit but is not recognized
in the parent’s consolidated financial statements. As a consequence, an entity shall gross up the
carrying amount of goodwill allocated to the unit to include the goodwill attributable to the non-
controlling interest. This adjusted carrying amount is then compared with the recoverable amount of the
unit to determine whether the cash-generating unit is impaired.
Allocating an impairment loss
IAS 36 requires any identified impairment loss to be allocated first to reduce the carrying amount of
goodwill allocated to the unit and then to the other assets of the unit pro rata on the basis of the
carrying amount of each asset in the unit.
If a subsidiary, or part of a subsidiary, with a non-controlling interest is itself a cash-generating unit, the
impairment loss is allocated between the parent and the non-controlling interest on the same basis as
that on which profit or loss is allocated.
If a subsidiary, or part of a subsidiary, with a non-controlling interest is part of a larger cash-generating
unit, goodwill impairment losses are allocated to the parts of the cash-generating unit that have a non-
controlling interest and the parts that do not. The impairment losses should be allocated to the parts of
the cash-generating unit on the basis of:
(a) to the extent that the impairment relates to goodwill in the cash-generating unit, the relative
carrying values of the goodwill of the parts before the impairment; and
(b) to the extent that the impairment relates to identifiable assets in the cash-generating unit, the
relative carrying values of the net identifiable assets of the parts before the impairment. Any
such impairment is allocated to the assets of the parts of each unit pro rata on the basis of the
carrying amount of each asset in the part.
In those parts that have a non-controlling interest, the impairment loss is allocated between the parent
and the non-controlling interest on the same basis as that on which profit or loss is allocated.
If an impairment loss attributable to a non-controlling interest relates to goodwill that is not recognized in
the parent’s consolidated financial statements, that impairment is not recognized as a goodwill
impairment loss. In such cases, only the impairment loss relating to the goodwill that is allocated to the
parent is recognized as a goodwill impairment loss.
Page 22 of 43
Example # 1
Parent acquires an 80 per cent ownership interest in Subsidiary for CU2,100 on 1 January 20X3. At that
date, Subsidiary’s net identifiable assets have a fair value of CU1,500. Parent chooses to measure the
non-controlling interests as the proportionate interest of Subsidiary’s net identifiable assets of CU300 (20%
of CU1,500). Goodwill of CU900 is the difference between the aggregate of the consideration
transferred and the amount of the non-controlling interests
(CU2,100 + CU300) and the net identifiable assets (CU1,500).
The assets of Subsidiary together are the smallest group of assets that generate cash inflows that are
largely independent of the cash inflows from other assets or groups of assets. Therefore Subsidiary is a
cash-generating unit. Because other cash-generating units of Parent are expected to benefit from the
synergies of the combination, the goodwill of CU500 related to those synergies has been allocated to
other cash-generating units within Parent. Because the cash-generating unit comprising Subsidiary
includes goodwill within its carrying amount, it must be tested for impairment annually, or more
frequently if there is an indication that it may be impaired (see paragraph 90 of IAS 36).
At the end of 20X3, Parent determines that the recoverable amount of cash-generating unit Subsidiary is
CU1,000. The carrying amount of the net assets of Subsidiary, excluding goodwill, is CU1,350.
Required: - Calculate and allocated impairment loss to goodwill and other assets, also identify the share
of loss of NCI and Group?
Example # 2
Parent acquires an 80 per cent ownership interest in Subsidiary for CU2,100 on 1 January 20X3. At that
date, Subsidiary’s net identifiable assets have a fair value of CU1,500. Parent chooses to measure the
non-controlling interests at fair value, which is CU350. Goodwill of CU950 is the difference between the
aggregate of the consideration transferred and the amount of the non-controlling interests (CU2,100 +
CU350) and the net identifiable assets (CU1,500).
The assets of Subsidiary together are the smallest group of assets that generate cash inflows that are
largely independent of the cash inflows from other assets or groups of assets. Therefore, Subsidiary is a
cash-generating unit. Because other cash-generating units of Parent are expected to benefit from the
synergies of the combination, the goodwill of CU500 related to those synergies has been allocated to
other cash-generating units within Parent. Because Subsidiary includes goodwill within its carrying
amount, it must be tested for impairment annually or more frequently if there is an indication that it
might be impaired.
Testing Subsidiary for impairment
At the end of 20X3, Parent determines that the recoverable amount of cash-generating unit Subsidiary is
CU1,650. The carrying amount of the net assets of Subsidiary, excluding goodwill, is CU1,350.
Required: - Calculate and allocated impairment loss to goodwill and other assets, also identify the share of loss of
NCI and Group?
Past Papers
On January 1, 2008, Misbah Holding Limited, dealing in textile goods, acquired 90% ownership interest in
Salman Limited (SL), a ginning company, against cash payment of Rs. 450 million. At that date, SL’s net
identifiable assets had a book value of Rs. 350 million and fair value of Rs. 400 million.
It is the policy of the company to measure the non-controlling interest at their proportionate share of
SL’s net identifiable assets.
During the year ended December 31, 2008, SL incurred a net loss of Rs. 150 million. The impairment
testing exercise carried out at the end of the year, by a firm of consultants, showed that the
recoverable amount of SL’s business is Rs. 200 million. However, the Board of Directors is inclined to take
a second opinion as they estimate that the recoverable amount is Rs. 390 million.
Required:
Based on each of the two valuations, compute the amounts to be reported in the consolidated
statement of financial position as of December 31, 2008 in respect of:
• Goodwill;
• Net identifiable assets, and
• Non-controlling interest. (15)
Page 23 of 43
CLASS ASSIGNMENT 1
Q-1
On 31 December 2009 P acquired all the shares of S for Rs.60,000. The statements of financial position of
the individual enterprises at that date were as follows:
Statement of financial position as at 31 December 2009 P S
Rs. Rs.
Total Assets
Non-current assets:
Property Plant & Equipment 120,000 40,000
Investment in shares of S 60,000 -
______ ______
180,000 40,000
Net Current Assets 20,000 10,000
______ ______
200,000 50,000
_______ ______
Equity and Liabilities
Capital and reserves:
Ordinary Shares of Rs 10.00 each 100,000 20,000
Retained Profits 100,000 30,000
_______ ______
200,000 50,000
Required:
Prepare the consolidated statement of financial position for the P Group on 31 December 2009.
Q-2
On 31 December 2008 Pacemaker acquired all the shares of Syclop for Rs. 60,000. At that time Syclop
accumulated profits were Rs. 30,000. The statements of financial position of the individual enterprises at
31 December 2009 were as follows:
Statements of financial position as at 31 December 2009 Pacemaker Syclop
Rs. Rs.
Total Assets
Non-current assets:
Investment in shares of Syclop 60,000 -
_______ ______
220,000 50,000
______ ______
250,000 60,000

Capital and Reserves:
Ordinary shares of Rs. 10.00 each 100,000 20,000
_______ ______
250,000 60,000
Consolidated Goodwill is subjected to an annual impairment review. No impairment has been
detected to date.
Required:
Prepare the consolidated statement of financial position for the pacemaker group on 31 December
2009.
Q-3
On 31 December 2009 Pedantic acquired 3,200 ordinary shares of Sophistic for Rs. 120,000. The
statements of financial position of the individual enterprises at 31 December 2009 were as follows:
Page 24 of 43
Statements of financial position as at 31 December 2009 Pedantic Sophistic
Rs. Rs.
Total Assets
Non-current assets:
Investment in shares of Sophistic 120,000 -
_______ ______
360,000 80,000
_______ ______
400,000 100,000
Ordinary shares of Rs.10 each 200,000 40,000
_______ ______
400,000 100,000
It is group policy to value non-controlling interest at its proportionate share of the subsidiary’s identifiable
net assets.
Required:
Prepare the Pedantic group’s consolidated statement of financial position at 31 December 20X1.
Q-4
On 31 December 20008, Patronic acquired 2,800 ordinary shares of Sardonic for Rs. 120,000. At that time
Sardonic accumulated profits were Rs. 60,000. The statements of financial position of the individual
enterprises at 31 December 2009 were as follows:
Statements of financial position as at 31 December 2009 Patronic Sardonic
Rs. Rs.
Total Assets
Non-current assets:
Investment in shares of Sardonic 120,000 -
_______ _______
440,000 100,000
Net Current Assets
60,000 20,000
______ ______
500,000 120,000
Ordinary shares of Rs. 10 each 200,000 40,000
______ ______
500,000 120,000
Note consolidated Goodwill is subjected to an annual impairment review. No impairment has been
detected to date. It is group policy to value non-controlling interest (NCI) at fair value; the fair value of
NCI was Rs. 35,600 at the date of acquisition.
Page 25 of 43
ASSIGNMENT # 2
Q-1
On 1 January 2009 PARVEZ acquired 1,800 ordinary shares of SAJID. At that time SAJID retained profits
were Rs. 16,000. The statements of financial position of the individual enterprises at 31 December 2009
are as follows:
Statements of financial position as at 31 December 2009 PARVEZ SAJID
Rs. Rs.
Total Assets
Non-current assets:
Cost of Investment in shares of SAJID 40,000 -
_______ ______
160,000 40,000
Current Assets
Inventories 20,000 10,000
Receivables 40,000 30,000
Current A/c with SAJID 16,000 -
Cash 4,000 -
_______ ______
240,000 80,000

Ordinary shares of Rs. 10.00 each 100,000 24,000
_______ ______
220,000 44,000
Current Liabilities:
Accounts payable 20,000 18,000
Current account with PARVEZ - 12,000
Bank Overdraft -
6,000 _______ ______
240,000 80,000
1. On 28th December 20X2 SAJID sent a cheque for Rs. 4,000 to PARVEZ. PERVEZ did not
account for this cheque until early January 20X3.
2. The group policy is to measure non-controlling interest at Fair value at the date of
acquisition. The fair value OF NCI was Rs. 15,000.
3. The fair value of Property, plant and equipment was Rs. 2,000 more than their carrying value
at the date of acquisition and those assets still exist in the statement of financial position of
the entity at the year end.
4. Consolidated goodwill is subject to an annual impairment review. The impairment loss
attributable to goodwill is Rs. 4,500.
Required: Prepare the PARVEZ group’s consolidated statement of financial position at 31 December
2009.
Q-2 The draft statement of financial position at 31 March 2002 of Window Limited and its 80%
subsidiary Glass Ltd, acquired on 30 September 2001, are as follows:
Window Glass
Limited Limited
Rs 000 Rs 000
Fixed assets
Intangible assets
Patents - 400
Goodwill - 550
Tangible assets 6,276 1,104
Page 26 of 43
Investments: Shares in Glass Ltd 180 -
6,456 2,054
Current assets
Stocks 1,854 806
Debtors 1,950 846
Suspense account 256 -
Cash 1,672 264
5,732 1,916
Creditors: amounts falling due within one year (3,428) (1,040)
Net current assets 2,304 876
Total assets less current liabilities 8,760 2,930
Capital and reserves

Called up share capital
Ordinary Rs 10 shares 4,000 1,400
Revaluation reserve 950 -
Profit and loss account 3,810 1,530
8,760 2,930
The following points are relevant.
(i) At acquisition the statement of financial position of Glass Ltd showed net assets with a
book value of Rs 2,530,000. Included in this total are freehold land with a book value of
Rs.500,000 (market value Rs 1,200,000), patents with a book value of Rs 400,000(market
value Rs 450,000) and goodwill (arising on the acquisition of an unincorporated business
some years ago) with a book value of Rs 600,000 (impairment loss of 50,000 has been
recognized in the post acquisition period by the acquiree). The fair values of all other
assets and liabilities are approximately equal to their book values. The above fair value
adjustments have not been incorporated in the separate books of Glass Limited.
(ii) The directors of Window Limited intend to restructure and reorganize Glass Ltd and wish
to provide for future losses and restructuring costs which are forecasted at Rs 116,000.
(iii) An investment in plant and machinery will be required to bring the remaining production
line of Glass Ltd up to date. This will amount to Rs 580,000 in the next 12 months.
(iv) The consideration comprised cash of Rs 180,000 and 80,000 shares of Window Limited
issued at a nominal value of Rs 10 and fair value of Rs 26 each. The shares have not yet
been reflected in the books of Window Limited.
(v) Professional fees to bankers and solicitors in respect of the acquisition amounted to Rs
150,000. In addition the directors of Window Limited estimate that the value of their time
spent on working the acquisition amounted to Rs 106,000.
(vi) Glass Ltd sells part of its output to Window Limited. Included in the stock of Window
Limited are goods valued at Rs 300,000 purchased from Glass Ltd at cost plus 25%.
(vii) Group policy is to measure full goodwill the fair value of NCI at the date of acquisition
was Rs. 20 per share.
Required:
(a) Calculate the value of goodwill if any arising on the acquisition of Glass Ltd.
(b) Show the Share Capital and Reserves on the consolidated statement of financial position of
Window Limited as at March 31 2002.
Page 27 of 43
ASSIGNMENT # 3
Q–1
M/S Haneef Ltd purchased entire share capital of M/S Sajid Power Ltd at the date of its incorporation,
several years before. The shares were purchased at par value of Rs. 10 each. The total number of shares
issued by Sajid Power Ltd was 100 million. Following is the trial balance of both the companies for the
year ended June 30, 2009.
Haneef Ltd Sajid Ltd
Debit Credit Debit Credit
Rs. (m) Rs. (m) Rs. (m) Rs. (m)
Sales -- 12,000 -- 7,500
Cost of investment in Sajid Ltd 1,000 -- -- --
Cost of sales 6,500 -- 4,500 --
Operating expenses 3,500 -- 1,500 --
Closing stock 2,300 -- 2,000 --
Property, plant and 3,500 -- 1,200 --
equipment
Accumulated depreciation -- 1,500 -- 700
b/f
Dividend income from Sajid -- 1,000 -- --
Ltd
Ordinary share capital -- 3,000 -- 1,000
Retained earnings opening -- 2,500 -- 2,000
Creditors -- 500 -- 300
Due from Sajid Ltd 1,000 -- -- --
Debtors 2,500 -- 1,500 --
Cash and bank balance 200 -- 500 --
Due to Haneef Ltd -- -- -- 700
Dividend paid -- -- 1,000 --
20,500 20,500 12,200 12,200
Further, the following intra group transactions took place.
a) Haneef Ltd sold goods worth Rs. 500 million to Sajid Ltd during the year of which 1/5th are still in
the inventory of Sajid Ltd. Haneef Ltd charges 20% margin on all goods it sells to associated
companies.
b) The intra group balances are not reconciled because of a cheque in transit of Rs. 200 million
sent by Sajid Ltd to Haneef Ltd and Rs. 100 million management fee charged by Haneef Ltd to
Sajid Ltd.
c) The depreciation for the year is not charged in the above balances, the group uses 20%
depreciation rate for all its property, plant and equipment on reducing balance basis. The
depreciation is to be charged in cost of sales.
Required: - Prepare consolidated statement of financial position as on June 30, 2009, statement of
comprehensive income and consolidated statement of changes in equity for the year ended June 30,
2009?
Q–2
M/S Haneef Ltd purchased entire share capital of M/S Sajid Ltd on July 01, 2008 by paying Rs. 12 per
share and issued one share for every five shares of Sajid Ltd. The par value per share of Sajid Ltd is Rs. 10.
Following is the trial balance of both the companies for the year ended June 30, 2009. The market value
of Haneef Ltd shares at the date of acquisition was Rs. 20 each.
Haneef Ltd Sajid Ltd
Rs. (m) Rs. (m) Rs. (m) Rs. (m)
Sales -- 12,000 -- 7,500
Cost of investment in Sajid Ltd 1,200 -- -- --
Cost of sales 6,500 -- 4,500 --
Operating expenses 3,500 -- 1,500 --
Page 28 of 43
Closing stock 2,300 -- 2,000 --
Property, plant and 3,300 -- 1,200 --
equipment
Accumulated depreciation -- 1,500 -- 700
b/f
Dividend income from Sajid -- 500 -- --
Ltd
Ordinary share capital -- 3,000 -- 1,000
Retained earnings opening -- 2,500 -- 500
Creditors -- 500 -- 1,300
Due from Sajid Ltd 1,000 -- -- --
Debtors 2,000 -- 1,500 --
Cash and bank balance 200 -- 500 --
Due to Haneef Ltd -- -- -- 700
Dividend paid -- -- 500 --
20,000 20,000 11,700 11,700
Further, the following intra group transactions took place.
a) Haneef Ltd sold goods worth Rs. 500 million to Sajid Ltd during the year of which 1/5th are still in
the inventory of Sajid Ltd. Haneef Ltd charges 20% margin on all goods it sells to associated
companies.
b) The intra group balances are not reconciled because of a cheque in transit of Rs. 200 million
sent by Sajid Ltd to Haneef Ltd and Rs. 100 million management fee charged by Haneef Ltd to
Sajid Ltd.
c) The depreciation for the year is not charged in the above balances, the group uses 20%
depreciation rate for all its property, plant and equipment on reducing balance basis. The
depreciation is to be charged in cost of sales.
Required: - Prepare consolidated statement of financial position as at June 30, 2009, statement of
comprehensive income and consolidated statement of changes in equity for the year ended June 30,
2009?
PAST PAPERS
Q–1
Following is the summarised trial balance of Faisal Limited (FL) and its subsidiaries, Saqib Limited (SL) and
Ayaz Industries Limited (AIL) for the year ended December 31, 2007:
FL SL AIL
Rs. (m) Rs. (m) Rs. (m)
Cash and bank balances 4,920 660 2,700
Accounts receivable 6,240 2,460 6,580
Stocks in trade – closing 14,460 4,200 5,680
Investment in subsidiaries – at cost
SL 9,000
AIL 10,500
Other investments 11,100
Property, plant and equipment 22,500 3,480 5,940
Cost of sales 49,200 18,000 21,000
Operating expenses 3,600 2,100 5,400
Accumulated depreciation (5,760) (420) (1,260)
Ordinary share capital (Rs. 10 each (30,000) (12,000) (6,000)
Retained earnings – opening (33,780) (4,800)
Sales (57,600) (16,500) (33,800)
Accounts payable (2,760) (1,980) (1,440)
Gain on sale of fixed assets (540)
Dividend income (1,080)
Following additional information is also available: -

Page 29 of 43
i) On January 01, 2007, FL acquired 480 million shares of AIL from its major shareholders for Rs.
10,500 million.
ii) SL was incorporated on February 01, 2007. 75% of the shares were acquired by FL at par value
on the same date.
iii) The following intercompany sales were made during the year 2007: -
Sales Included in Amount Gross profit %
buyer’s closing receivable / on sales
stocks in trade payable at year
end
Rs. (m) Rs. (m) Rs. (m) Rs. (m)
FL to AIL 2400 900 20
SL to AIL 1800 600 800 10
AIL to FL 3600 1200 30
FL and its subsidiaries value stock in trade at the lower of cost or net realizable value. While
valuing FL’s stock in trade, the stock purchased from AIL has been written down by Rs. 100
million.
iv) On July 01, 2007, FL sold certain plants and machines to SL. Detail of the transaction are as
follows: -
Rs. (m)
Sale value 144
Less: cost of plant and machineries 150
Accumulated depreciation (60)
Net book value 90
Gain on sale of plants 54
The plants and machineries were purchased on January 01, 2005, and were being depreciated
on straight line method over a period of five years. SL computed depreciation thereon using
the same method based on the remaining useful life.
FL billed Rs. 100 million to each subsidiary for management services provided during the year
2007 and credited it to operating expenses. The invoices were paid on December 15, 2007.
v) Details of cash are as follows:-
Dividend
Date of declaration Date of payment %
FL Nov 25, 2007 Jan 5, 2008 20
AIL Oct 15, 2007 Nov 20, 2007 10
Required: -
Prepare consolidated balance sheet and profit and loss account of FL and its subsidiaries for the year
ended December 31, 2007. Ignore tax and corresponding figures.
Q–2
On January 1, 2002, Khan Limited (KL) acquired 375 million ordinary shares and 40 million preference
shares in Gul Limited (GL) whose general reserve and retained earnings on the date of acquisition,
stood at Rs. 200 million and Rs. 1,000 million respectively.
The following balances were extracted from the records of KL and its subsidiary on December 31, 2008:
KL GL
Rs. (m) Rs. (m) Rs. (m) Rs. (m)
Ordinary share capital (Rs. 10 each) 6,800 5,000
12% Preference share capital (Rs. 10 each) 1,000
General reserve 1,750 500
Loan from KL at 15% rate of interest 2,000
14% Term Finance Certificates (TFCs) (Rs. 100 2,250
each)
Page 30 of 43
Accounts payable 445 190
Dividend payable – preference shares 60
Dividend payable – ordinary shares 750 300
Property, plant and equipment - at cost 16,250 25,000
Property, plant and equipment - acc. 9,750 17,000
depreciation
Investment in ordinary shares of GL 5,500
Investment in preference shares of GL 400
Loan to GL at 15% rate of interest 2,000
Investment in KL's TFCs (purchased at par value) 1,500
Profit before tax, interest and dividend 2,865 1,550
Dividend income 273
Interest income 300 210
Dividend receivable 249
Interest on TFCs 315
Interest on loan from KL 300
Taxation 650 474
Preference dividend 120
Ordinary dividend – interim 750 300
27,183 27,183 29,010 29,010
Following relevant information is available: -
i) At the date of acquisition the fair value of buildings included in property, plant and equipment
of GL was assessed at Rs. 1000 million above its carrying value. All other identifiable assets and
liabilities were considered to be fairly valued. GL provided for depreciation on building at 10%
on the straight line basis.
ii) GL purchased the TFC in KL on January 01, 2008.
iii) The non controlling interest is measured at their proportionate share of the GL’s identifiable net
assets.
iv) There is no impairment in the value of goodwill since its acquisition.
v) There are no components of other comprehensive income.
Required: -
Prepare the following in accordance with the requirement of International Financial Reporting
Standards: -
(a) Consolidated statement of financial position as at December 31, 2008.
(b) Consolidated statement of comprehensive income for the year ended December 31, 2008.
(c) Consolidated statement of retained earnings for the year ended December 31, 2008.
Note:
Ignore deferred tax and corresponding figures.
Notes to the above statements are not required. However, show workings wherever it is necessary.
Page 31 of 43
ANSWERS TO ASSIGNMENTS
Assignment # 1
A-1
P Group
Consolidated statement of financial position
As at December 31, 2009
Rs. Rs.
Assets
Non-current assets
Property, plant and equipment 160,000
Goodwill 10,000
170,000
Current assets
Net current assets 30,000
200,000
Equity
Ordinary share capital 100,000
Consolidated retrained earnings 100,000 200,000
W-1 Group structure %

Group 100
NCI --
100
W-2 Cost of control account Debit Credit
Investment 60,000
Share capital 20,000
Pre-acquisition retained earnings 30,000
Goodwill 10,000
60,000 60,000
A-2
Pacemaker Group
Rs. Rs.
Assets
Non-current assets
Goodwill 10,000
220,000
Current assets
260,000
Equity
(150,000+10,000)

Group 100
NCI --
100
Page 32 of 43
Investment 60,000
Goodwill 10,000
60,000 60,000
A-3
Pedantic Group
Rs. Rs.
Assets
Non-current assets
Goodwill 40,000
360,000
Current assets
420,000
Equity
NCI 20,000
420,000

Group 80
NCI 20
100
Investment 120,000
(60,000x0.80)
Goodwill 40,000
120,000 120,000
W-3 NCI
Share capital 8,000
SRE-pre 12,000
C/ d 20,000
20,000 20,000
A-4
Patronic Group
Rs. Rs.
Assets
Non-current assets
Goodwill (50,000+5,600) 55,600
475,600
Current assets
Page 33 of 43
555,600
Equity
(300,000+14,000)
NCI 41,600
555,600

Group 70
NCI 30
100
Investment 120,000
Share capital (40,000 x 0.70) 28,000
Pre-acquisition retained earnings (60,000x0.70) 42,000
Goodwill 50,000
120,000 120,000
W-3 NCI
SRE-pre 18,000
SRE-post (20,000x0.30) 6,000
Goodwill 5,600
C/ d 41,600
41,600 41,600
W-4 NCI goodwill
Fair value of NCI 35,600
SRE-pre 18,000
Goodwill 5,600
Assignment # 2
A-1
PARVEZ Group
Rs. Rs.
Assets
Non-current assets
Property, plant and equipment (160,000+2,000) 162,000
Goodwill (13,000-4,500) 8,500
170,500
Current assets
Inventories 30,000
Receivables 70,000
Current a/c with SAJID (16,000-12,000-4,000)
Cash (4,000+4,000) 8,000
108,000
278,500
Equity
Consolidated earnings (120,000-3,375+3,000) 119,625 219,625
NCI 14,875
Page 34 of 43
234,500
Current liabilities
Accounts payable 38,000
Bank overdraft 6,000
44,000
278,500

Group 75
NCI 25
100
Investment 40,000
Share capital (24,000x.75) 18,000
Pre-acquisition retained earnings (18,000x.75) 13,500
Goodwill 8,500
40,000 40,000
W-3 NCI
Share capital 6,000
SRE-pre 4,500
SRE-post (4,000x.25) 1,000
Goodwill 4,500
Impairment loss 1,125
C/ d 14,875
16,000 16,000
W-4 NCI goodwill
Fair value of NCI 15,000
Share capital (6,000)
SRE-pre (4,500)
Goodwill 4,500
W-5 Subsidiary Retained Earnings
At reporting date 20,000
Fair value gain (pre) 2,000
Pre-acquisition (18,000)
Post acquisition 4,000
A–2
WINDO LIMITED
CONSOLIDATED STATEMENT OF FINANCIAL STATEMENT
AS AT MARCH 31, 2001
Rs. (000) Rs. (000)
FIXED ASSETS
Intangible assets
Patents (400+50) 450
Goodwill 140
Tangible assets (7,380+700) 8,080 8,670
CURRENT ASSETS
Stocks (2,660-60) 2,600
Debtors 2,796
Cash 1,936 7,332
16,002
EQUITY AND LIABILITIES
Page 35 of 43
Equity
(4,000+800)
Share premium 1,280
Revaluation reserve 950
NCI 638
11,534
Current liabilities
Creditors 4,468
16,002
Workings
W-1
Group retained earnings (Parent co.) 3,810
Suspense account (256)
Share of post acquisition profits 312
3,866
W-2 Dr. Cr.

Subsidiary retained earnings
Balance 1,530
Fair value gain (700+50) 750
Goodwill 550
URP on closing stock 60
Cost of control account (1,280x0.80) 1,024
NCI (1,280x0.20) 256
Consolidated retained earnings 312
(390x0.80)
NCI (390x0.20) 78
2,280 2,280
W-3 Cost of control account
Cost of investment (180+2,080) 2,260
Share capital 1,120
Goodwill 116
2,260 2,260
W-4
Share capital 280
Pre-acquisition retained earnings 256
Post-acquisition retained earnings 78
Goodwill 24
638
W- 5
Goodwill NCI
Fair value of NCI 560
Less: share of net assets acquired (536)
Goodwill 24
Assignment # 3
Page 36 of 43
A-1
HANEEF LIMITED
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
FOR THE YEAR ENDED JUNE 30, 2009
Assets Rs. (m) Rs. (m)
Non Current Assets
Property, plant equipment (W-6) 2,000
Goodwill -- 2,000
Current Assets
Stock (4,300-20) 4,280
Account Receivable 4,000
Cash at Bank (700+200) 900 9,180
Total assets 11,180

Equity
Share premium
Consolidated retained earnings 7,380 10,380
Current liabilities
Trade payables 800 800
Total equity and liabilities 11,180
HANIF LIMITED
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Ordinar Consolidated Total
y share retained earnings
capital
Rs. (m) Rs. (m) Rs. (m)
Balance b/ f 3,000 4,500 7,500
Total comprehensive income -- 2,880 2,880
Dividend
3,000 7,380 10,380
HANIF LIMITED
HL SL Adjustments Consolidated
Sales 12,000 7,500 (500) 19,000
Cost of sales (6,500) (4,500) (20) (11,020)
Gross profit 5,500 3,000 (520) 7,980
Operating expenses (3,500) (1,500) (100) (5,100)
Operating profit 2,000 1,500 (620) 2,880
Dividend income 1,000 -- (1,000) --
Profit for the year 3,000 1,500 (1,620) 2,880
Workings
W-1 Percentage of holding %
Group 100
NCI --
Page 37 of 43
100
W-2 Cost of control account-SL Rs. Rs.
Investment 1,000
Goodwill --
W-3 adjusting entries Debit Credit
Sales 500
Cost of sales 500
Cost of sales 20
c. Stock 20
Cash in transit 200
Due from Sajid Limited 200
Operating expenses 100
Due to Haneef Limited 100
Cost of sales 500
Assets a/c 500
W-4 Opening retained earnings -group Rs. Rs.
Parent company 2,500
Subsidiary post acquisition 2,000
Goodwill 4,500
W-5 property, plant and equipment HL SL Total

Rs. Rs. Rs.
Cost 3,500 1,200 4,700
Accumulated depreciation b/ f (1,500) (700) (2,200)
Carrying value b / f 2,000 500 2,500
Depreciation for the year (400) (100) (500)
Goodwill 1,600 400 2,000
A-2
HANEEF LIMITED
Non Current Assets
Property, plant equipment (2,300-460) 1,840
Goodwill 100 1,940
Current Assets
Stock (4,300-20) 4,280
Account Receivable 3,500
Cash at Bank (700+200) 900 8,680
Total assets 10,620

Equity
Share premium 200
Current liabilities
Page 38 of 43
HANIF LIMITED
Ordinar Share Consolidated Total
y share premium retained earnings
capital
Rs. (m) Rs. (m) Rs. (m) Rs. (m)
Balance b/ f 3,000 -- 2,500 5,500
Shares issued during the year 200 200 -- 400
Total comprehensive income -- 2,920 2,920
Dividend
3,000 200 5,420 8,820
HANIF LIMITED
HL SL Adjustments Consolidated
Sales 12,000 7,500 (500) 19,000
Cost of sales (6,500) (4,500) 20 (10,980)
Gross profit 5,500 3,000 (480) 8,020
Operating expenses (3,500) (1,500) (100) (5,100)
Dividend income 500 (500) --
Profit for the year 2,500 1,500 (1,080) 2,920
Workings
Group 100
NCI --
100
Investment (1,200+400) 1,600
Retained earnings 500
Share capital 1,000
Goodwill 100
Sales 500
Cost of sales 500
Cost of sales 20
c. Stock 20
Cash in transit 200
Due from Sajid Limited 200
Operating expenses 100
Due to Haneef Limited 100
Cost of sales 460
Assets a/c 460
Page 39 of 43
PAST PAPERS
A-1
FAISAL LIMITED
AS AT JUNE 30, 2008
Non Current Assets
Property, plant equipment (24,480- 24,444
54+18)
Other investments 11,100
Goodwill 1,860 37,404
Current Assets
Stock (24,340-530) 23,810
Account Receivable (15,280-800) 14,480
Cash at Bank 7,680 45,970
Total assets 83,374

Equity
Non-controlling interest 5,531
71,994
Current liabilities
Trade payables (6,180-800) 5,380
Dividend payable 6,000 11,380
FAISAL LIMITED
Ordinar Consoli Total NCI Total
y share dated
capital retaine
d
earning
s
Balance b/ f 30,000 33,780 63,780 -- 63,780
Subsidiary company acquired during the 5,160 5,160
year
Total comp. income -- 8,683 8,683 491 9,174
Dividend (6,000) (6,000) (120) (6,120)
30,000 36,463 66,463 5,511 71,994
FAISAL LIMITED
FL SL AIL Adjustments Consolidated
Sales 57,600 16,500 33,800 (7,800) 100,100
Cost of sales (49,200) (18,000) (21,000) 7,288 (80912)
Gross profit 8,400 1,500 12,800 (512) 19,88
Page 40 of 43
Operating expenses (3,600) (2,100) (5,400) -- (11,100)
Operating profit 4,800 (3,600) 7,400 (512) 8,088
Gain on sale of PPE 540 -- -- (54) 486
Dividend income 1,080 -- -- (480) 600
Profit for the year 6,420 (3,600) 7,400 (1,046) 9,174
NCI -- 911 (1,042) -- (491)
Profit attributable to group 6,420 (2,689) 6,358 (1,046) 8,683
Workings
W-1 Percentage of holding % %
Group 75 80
NCI 25 20
100 100
Investment 9,000
Goodwill --
W-3 Cost of control account-AIL
Investment 19,500
Pre-acquisition reserves (3,840)
Goodwill 1,860
W-4 NCI at date of acquisition SL AIL
Pre-acquisition reserves -- 960
3,000 2,160
W-6 Opening retained earnings
Parent company 33,780
Share from SL --
Share from AIL --
33,780
W-7 Opening retained earnings- Pre- Post-
AIL
Balance brought forward 4,800 --
Group share 3,840
NCI share 960
W-8 Dividend AIL
Brought forward 600
Adjustment against profit or loss 480
a/c
NCI 120
Sales 7,800
Cost of sales 7,800
Cost of sales 180
c. Stock 180
Cost of sales 60
c. Stock 60
Cost of sales 290
c. Stock 290
Gain on sale of fixed assets 54
Assets a/c 54
Fixed assets 18
Cost of sales 18
Page 41 of 43
W-10 NCI SL AIL
Profit after tax (3,600) 7,400
Adjustments
Un-realized profit (60) (390)
Extra depreciation 18 --
(3,642) 7,010
NCI (910.50) (1,402)
A–2
KHAN LIMITED
AS AT DECEMBER 31, 2008
Non Current Assets
Property, plant equipment 14,800
(41,250-26,750+1,000-100-600)
Goodwill 100 14,900
Current Assets 2,385
Total assets 17,285

Equity
Consolidated retained earnings
14,514
Non-current liabilities
12% preference share capital (1,000-400) 600
14% TFC’s (2,250-1,500) 750 1,350
Current liabilities
Trade payables 635
Dividend payable (750+36) 786 1,421
KHAN LIMITED
FOR THE YEAR ENDED DECEMBER 31, 2008
Ord. Cons. Cons. Total NCI Total
share Gen. Retd.
capital Reserves earnings
Balance b/ f 6,800 1,975 1,700 10,475 1,775 12,250
Total comprehensive income -- -- 2,822 2,822 192 3,014
Dividend -- -- (750) (750) -- (750)
6,800 1,975 3,772 12,547 1,367 14,514
KHAN LIMITED
FOR THE YEAR ENDED DECEMBER 31, 2008
KL GL Adjustments Consolidated
Dividend income 273 (273) -
Page 42 of 43
Interest income 300 210 (510)
Interest on TFC’s (315) -- 210 (105)
Interest on loan -- (300) 300 --
Preference dividend -- (120) 48 (72)
Profit before tax 3,123 1,340 (325) 4,282

Tax expense (650) (474) -- (1,124)
Profit after tax 2,473 866 (325) 3,014
Attributable to: - NCI 192
(866-100)x25%
Owners of parent 2,822
Workings
Group 75
NCI 25
100
W-2 Cost of control account Rs.
Investment 5,500
Pre-acquisition reserves (1,500+150) (1,650)
Goodwill 100
W-3 NCI-Opening
Share capital 1,250
Pre-acquisition reserves (500+75) 575
Post-acquisition reserves (50-100) (50)
1,775
W-4 Opening retained earnings/General Res GR R/E
Parent company 1,750 2,000
Share from GL 225 (300)
1,975 1,700
W-5 Opening retained earnings-GL Pre- Post-
Balance brought forward 1,000 200
Fair value gain 1,000 --
Extra Depreciation -- (600)
2,000 (400)
Group share 1,500 (300)
NCI share 500 (100)
W-6 Opening General Reserves – GL Pre- Post-
Balance brought forward 200 300
200 300
Group share 150 225
NCI share 50 75
W – 7 adjusting entries Debit Credit
Opening retained earnings -GL 600
Cost of sales 100
Property, plant and equipment 700
Page 43 of 43

Vdocuments - MX - Chapter 5 578590693cc3a PDF

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Vdocuments - MX - Chapter 5 578590693cc3a PDF

Uploaded by

Copyright:

Available Formats

CHAPTER 5

IFRS 10 CONSOLIDATION OF PARENT AND SUBSIDIARY

⇒ Share Capital of subsidiary

Determination of cost IFRS – 3 Date of Calculation of goodwill

Determination of Fair Determination of value

2. Share capital of subsidiary company

3. Subsidiary company reserves

Example 1 Acquisition of wholly owned subsidiary

7. Intra group sale of fixed assets

Share capital (Rs. 1 Ord.). 50,000 40,000

8. Fair value adjustment of depreciable assets

Share capital (Rs. 1 Ord.). 50,000 40,000

13 Other Fair Value Adjustments

Haseeb Ltd. Saqib Ltd.

CONSOLIDATION OF STATEMENT OF COMPREHENSIVE INCOME

C/D Parent C/D Subsidiary Statement of Consolidated

SN1 – Intra Group Sales Debit: Sales Credit: Cost of

SN7 – Adjustment Profit and allocate value of NCI

GOODWILL IMPAIRMENT UNDER IAS 36

Equity and Liabilities

Equity and Liabilities

Capital and reserves

Following additional information is also available: -

W-1 Group structure %

W-1 Group structure %

W-1 Group structure %

W-1 Group structure %

W-1 Group structure %

W-2 Dr. Cr.

Total assets 11,180

W-5 property, plant and equipment HL SL Total

Total assets 10,620

Total assets 83,374

Current Assets 2,385

Total assets 17,285

Profit before tax 3,123 1,340 (325) 4,282

You might also like