Consolidated statement of profit or loss

for the year ended 30 September 2019

Revenue 1150000
Costs -743000
407000
share of profit of associates 19000
Profit for the year (PFY) 426000
income tax -125000
Profit after tax 301000

Profit for the year attributable to:

Owners of P (balancing figure) 275000
Minority interest 26000
301000

Consolidated statement of changes in equity

for the year ended 30 September 2019

Net profit 275000

final dividend on ordinary shares 110000
385000
balance b/f 672000
balance c/f 1057000
Austen Plc

Trade Receivable for Austen Plc

(+) Trade Receivable of Kipling Ltd (s)
Trade Receivable Kipling Ltd
(-) Intra group trading ( 2000 +3000)

Trade Receivable

(2) A cheque for £6,000 posted by Austen plc on 30 December 20X5 was n
Ltd until 4 January 20X6.

Not allowed to include in the Trade Receivable of Austen Plc since Dic
 £ 50,000.00

£ 30,000.00
€ (5,000.00)
£ 25,000.00
£ 75,000.00

Austen plc on 30 December 20X5 was not received by Dickens

de Receivable of Austen Plc since Dickens Ltd is an associate not a subsidiary.

All balances with associates are retained on consolidation
H 50,000
S1 80,000
130,000

The £75,000 DR in S2 dissapears once adjustment has been made for cash in transit
All balances with associates are retained on consolidation
H 110,000
S2 140,000
250,000

The £75,000 DR in S2 dissapears once adjustment has been made for cash in transit
e for cash in transit

e for cash in transit

HELEN PLC

Information:
Cost of Investment € 90,000
at acquisition date
Share Capital € 70,000
Retained Earning € 96,000
FV of land € 60,000
CA of land € 42,000

Troy Ltd has reported profit for the year of

£118,000 including £110,000 made in the
current year € 118,000
Impairment Loss € 2,560

Requirement
What is the net amount to be included in the consolidated statement of profit or loss for the year
ended 31 December 20X9 in respect of Troy Ltd?

Profit of Troy Ltd at current year € 110,000 x 35%

(-) Impairment Loss

Net amount to be included in Statement of profit or loss for the year ended 31/12/20X9 in respect of Tr
profit or loss for the year

€ 38,500
€ 2,560
€ 35,940

d 31/12/20X9 in respect of Troy Ltd is € 35,940

 EVE LTD ON 1/1/20X0
Information:
Cost of Investment € 55,000.00
at acquisition date
Retained Earning € 60,000.00

fair value of net assets, which was

subsequently reflected in Eve Ltd’s books € 170,000.00

Requirement
At what amount should Adam Ltd’s investment in Eve Ltd be stated in its consolidated statement of
financial position at 31 December 20X4?

Cost of investment € 55,000.00

(+) Share at post acquisition change in net

asset(310000-170000)*30% € 42,000.00
Investment in Associate € 97,000.00
 EVE LTD ON 31/12/20X4
Share capital € 100,000.00
Revaluation surplus € 10,000.00
Retained earnings € 200,000.00
Total equity € 310,000.00

solidated statement of
Cost of investment 250,000
Share of post acquistion increase in net assets
(420,000-210,0000)x40% 84,000
Share of depreciation on Fair Value Assets
((60,000x 3/20)x 40%) -3,600
Investment in joint venture 330,400
 Workings

(W1) P - Haley Ltd

S - Socrates Ltd (60%)
A - Aristotle Ltd (30%)

(W2) Net Assets (Socrates Ltd)

Year end (£) Acquisition (£)

Share capital 30,000 30,000
Retained Earnings 180,000 70,000
210,000 100,000

(W3) Goodwill (S Ltd)

(£)
Consideration transferred 75,000
NCI at Acquisition (40% x 100,000 (W2)) 40,000
Net Assets at Acquisition -100,000
Less: Impairment loss -12,000
Goodwill 3,000

(W4) NCI at year end

(£)
Share of net assets at acquisition
(40% x 100,000 (W2)) 40,000
Share of Post-acquisition
(40% x 110,000 (W2)) 44,000
84,000

(W5) Retained Earnings

(£)
P : Haley Plc 400,000
S : Socrates Ltd (60% x 110,000 (W2)) 66,000
A : Aristotle Ltd ( 30% x (100,000 - 30,000)) 21,000
Less: Impairment loss (12,000 + 2,400) - 14,400
472,600

(W6) Investment in Associates

(£)
Original cost 30,000
Share of post-Acquisition
(30%*(100,000-30,000) 21,000
51,000
Less: Impairment loss -2,400
48,600
 Consolidated Statement of Financial Position as at 31 December 20X9

Non-current Assets
Intangibles (W3)
Investment in Associates (W6)
Property, Plant & Equipment (300,000 + 100,000)

Post-Acquisition (£) Current Assets (345,000 + 160,000)

0 Total assets
110,000
Equity attributable to owners of the parent
Share capital
Retained Earning (W5)

NCI (W4)
Total Equity
Liabilities (100,000+50,000)
 (£)

3,000
48,600
400,000
451,600
505,000
956,600

250,000
472,600
722,600
84,000
806,600
150,000
956,600
 Workings

(W1) P: Corfu Ltd

S: Zante Ltd (80%) - Acquired in 1 February 20X9 (only 5/12 months)
A: Paxos Ltd (30%) - Acquired in 1 July 20X9

(W2) Consolidation Schedule

Zante Ltd (£)

Corfu Ltd (£) 5/12 months only Adjustment (£)
Revenue 12,614,000 2,566,667 -50,000
Re Paxos Ltd
(30% x 150,000) - 45,000.00
Cost of Sales & Exp
Per Q -11,318,000 - 2,301,667 50,000

Re Paxos Ltd
(30% x 150,000 x
(100,000/125,000)) 36,000
Income tax expense -621,000 - 114,583
150,417

(W3) NCI

Zante Ltd : 20% x 150,417 30,083

(W4) Share of profit associates

Paxos Ltd : (30% x 594,000) 178,200

 Consolidated Statement of Profit or Loss for Corfu Ltd for the year ended 30 June 20X9

Revenue (W2)
Cost of Sales & Exp (W2)
Gross profit
Share of profit Associates (W4)
Profit before tax

Consolidation (£) Income tax expense

Profit for the year

15,085,667 Profit attributables to:

Owners of Corfu Ltd (Balancing figure)
NCI (W3)

-13,533,667
-735,583
r the year ended 30 June 20X9

(£)
15,085,667
-13,533,667
1,552,000
178,200
1,730,200

-735,583
994,617

964,533
30,083

994,617
 Consolidated statement of profit or loss
for the year ended 30 September 2019

Revenue 1150000
Costs -743000
407000
share of profit of associates 19000
Profit for the year (PFY) 426000
income tax -125000
Profit after tax 301000

Profit for the year attributable to:

Owners of P (balancing figure) 275000
Minority interest 26000
301000

Consolidated statement of changes in equity

for the year ended 30 September 2019

Net profit 275000

final dividend on ordinary shares 110000
385000
balance b/f 672000
balance c/f 1057000
1 King Ltd

80% 25%

Prawn Ltd Madras Ltd

2 King ltd Prawn Ltd Adj Consolidated

Revenue 800000 430000 -80000 1150000
C of S and expenses -550000 -255000 80000
PURP (36000x25%) -9000
Impairment of goodwill-Prawn Ltd -9000 -743000
Income tax -80000 -45000 -125000
PAT 152000 130000

3 Prawn Ltd - Minority interest

130000x20%= 26000

4 Retained earning b/f Consolidated

King Ltd 600,000
Prawn Ltd (80%x 320000-260000) 48000
Madras Ltd (25%x 540000-340000) 50000
(-) impairment to date (9000+17000) -26000
672,000

5 Share of profit of associates

madras Ltd (25%x100000)-6000 = 19000
 Water Ltd
consolidated statement of financial position Workings:
at 30 September 20X5 1. Group structure
ASSETS
Water Ltd
Non-current assets
Property, plant and equipment 1345220
80%
Intangibles (3) 1000
Investments in associates (7) 270400
1616620 Hydrogen Ltd
Current assets
Inventories 879784
Trade receivables 736257
Cash and cash equivalents 196284 2. Net assets
1812325 Hydrogen Ltd

Total assets 3428945

Share capital
EQUITY AND LIABILITIES Retained earnings
Capital and reserves
Ordinary share capital 600000
Retained earnings (5) 1353200
Attributable to equity holders 1953200
NCI 203200
Equity 2156400 Oxygen Ltd

Non-current liabilities 550000 Share capital

Retained earnings
Current liabilities
Trade payables 722545
Total equity and liabilities 3428945 3. Goodwill
Hydrogen Ltd
Cost of shares
Share of net assets acqu

Impairement to date
Balance c/f
Workings:
1. Group structure 4. NCI
Share of net assets
Water Ltd

40% 5. Retained earnings

80%
Water Ltd
Hydrogen Ltd
Hydrogen Ltd Oxygen Ltd Oxygen Ltd
(-) Impairment to date

2. Net assets 6. PURP

Hydrogen Ltd SP

At 30 September Acquisition Post-acquisiton

20X5 Cost
Share capital 200000 200000 0 GP
Retained earnings
Per question 820000
(-) PURP(6) -4000 7. Investments in associates
816000 500000 316000 Cost of investment in Oxygen Ltd
1016000 700000 316000 Share of post acquisition in net as

Oxygen Ltd At 30 September Impairment to date

20X5 Acquisition Post-acquisiton
Share capital 200000 200000 0
Retained earnings 463000 242000 221000
663000 442000 221000

3. Goodwill
Hydrogen Ltd
Cost of shares 562000
Share of net assets acquired -560000
2000
Impairement to date -1000
Balance c/f 1000
 203200

ed earnings
1015000
252800
88400
rment to date -3000
1353200

125% 20000

-100% -16000
25% 4000

ments in associates
nvestment in Oxygen Ltd 184000
post acquisition in net assets 88400
272400
-2000
270400
1) Significant influence
Most investments require the power of decisions rather than total regulation.
Investments are handled in line with BAS 28 Investments in Partnerships as partners and equity accounted for in re

2) Simple investment
The investor has no significant involvement in the investee undertaking.
The cost of such investments is shown in the statement of financial position.

3) Control
The investment will be trated as a subsidiary and consolidated in accordance with BAS27 Consolidate and Separate
NCI is shown in order to indicate the proportion not owned by the group.
and equity accounted for in restructuring.

S27 Consolidate and Separate Financial Statements.

Explanation of accounting method used in SOFP for:

i) Subsidiary
• 100% of net assets of subsidiary will be included in a line-by-line basis
• unrealised profits from intra-group sales of inventory and PPE will be removed
• intra groups balances will be contra'd out
• goodwill recognised when cost of acquisition exceeds the share of fair value of net assets acquired
• minority interest will show value of net assets included in cosolidated SOFP but owned by outside interests
• consolidated retained earnings will include parent company's percentage of subsidiary 's post acquisition profits a

ii) Associate
• costs of investment increased by share of the post acquisition increase in the associate's net assets and decrease
• consolidated retained aernings will include the parent company's percentage of the associate's post acquisition a
ssets acquired
ed by outside interests
ry 's post acquisition profits and cumulative goodwill impairments to date

ate's net assets and decreased by any impairment losses

associate's post acquisition and cumulative investments impairments to date