Plateau

Calculation of goodwill for subsidiary

$’000 $’000
Investment in subsidiary
Shares in Plateau 9,000 [(3m/2X1)X$6]
Cash 3,000 [3mX$1]
12,000
less: net assets acquired
Share capital 4,000
Retained earnings 6,500
Fair value adjustment
- Land 700
11,200
Share of net assets 75% NCI
(8,400.00) 2,800
Goodwill 3,600
less: impairment charge (900)
Goodwill balance - 30 Sep 2007 2,700

Adjustments for retained earnings

Plateau Sahara
$’000 $’000
Unadjusted balance 24,100 8,900
Unrealised profit on inventory sale (300) [(2.7mX50/150)X1/3]
Unrealised gain on sale of plant (500)
Over-depreciation - plant 100 [500k/5yrs]
Goodwill impairment (900)
Retained earnings (adjusted) 22,800 8,600
less: pre-acq reserve (6,500)
Ending retained earnings 22,800 2,100
Share of net assets 100% 75% Total RE
22,800 1,575.00 24,375.00
525.00 NCI
Plateau
Consolidated Statement of Financial Position as at 30 Sep 2007
$’000 $’000
Non-current assets
[+700k reval; -500k gain;
PPE (net) 29,100 +100k over-depn]
Investments 8,500
Goodwill 2,700
40,300

Current assets
Inventory 12,800 [-300k unrealised profit]
[-850k intragrp; -
Trade and other receivables 3,250 (800kX75%) div S]
Cash and cash equivalents 4,130 [+130k cash-in-transit]
20,180
Total assets 60,480

Equity & Reserves

Share capital 12,000 [Parent only]
Retained earnings 24,375
36,375
[2,800k pre-acq + 525k
Non-controlling interests 3,325 post-acq RE]
39,700

Non-current Liabilities
7% loan notes 6,000

Current Liabilities
[-720k intragrp; -
Trade and other payables 14,780 (800kX75%) div S]
Total equity & liabilities 60,480 -
Procter
Calculation of goodwill for subsidiary
$’000 $’000
Cost of investment
Shares in Procter 24,000
Cash consideration 1,600 [80% X 10m X 0.20]
NCI 7,000 [(20% X 10m X 3.50]
32,600
less: net assets acquired
Share capital 10,000
Retained earnings 18,000
Fair value adjustment
- Revaluation gain/reserve 3,000
- Provision for warranty (1,000)
(30,000)
Goodwill 2,600

Adjustments for retained earnings

Procter Samson
$’000 $’000
Unadjusted balance 30,200 26,000
Under-depreciation - plant (600) [3m / 5yrs]
Unrealised profit on sale of eqt (40)
Over-depreciation - eqt 10
Unrealised profit on inventory sale (500) [(16k - 14.5k) X 50/150]
Retained earnings (adjusted) 29,700 25,370
less: pre-acq reserve (18,000)
Ending retained earnings 29,700 7,370
Share of net assets 100% 80% Total RE
29,700 5,896.00 35,596.00
1,474.00 NCI
Procter
Consolidated Statement of Financial Position as at 30 Sep 2016
$’000 $’000
Non-current assets
[+ 3m reval gain; - 600k
depn; - 40k URP; + 10k over-
PPE (net) 69,970 depn]
Investments 8,000
Goodwill 2,600
80,570

Current assets
[+ 1.5m goods in transit; -
Inventory 25,400 500k URP]
Trade receivables 15,100 [ - 4.4m intragrp]
[-1.6m invt in S
Bank 2,500 + 1.2m cash-in-transit]
43,000
Total assets 123,570

Equity & Reserves

Share capital 25,000 [Parent only]
Capital reserve 17,600
Retained earnings 35,596
78,196
[ 7m pre-acq
Non-controlling interests 8,474 + 1.474m post-acq RE]
86,670

Non-current Liabilities
10% loan notes 13,500 [- 2.5m intragrp debt]

Current Liabilities
[ + 1.5m purchase
Trade payables 12,800 - 3.2m intragrp]
Dividends payable 3,000
Provisions 7,100 [+ 1m warranty]
Other payables 500 [dividends to NCI]
23,400
Total equity & liabilities 123,570 -

Intragroup balances
Procter Samson
$’000 $’000
Unadjusted bal 4,400 1,700
Goods-in-transit 1,500 [16m - 14.5m]
Cash-in-transit (1,200) Bal fig
Adjusted bal 3,200 3,200