Party Co.

Workings ($000)

W1 Group structure W2 Fair value adjustment

1 Oct x4 1 year 30 Sep x5
Parent Party Co. Acq'n Movement Rep'n
Sub Streamer Co.
% Inventory
RE at acq Goodwill CRE SOFP

W3 Goodwill

Consideration - cash
Consideration - deferred Unwinding
Fair value of NCI
-
Fair value of net assets at acq'n
Share capital
Retained earnings
Revaluation surplus
Fair value adjustment
-

Goodwill at acquisition -

W4 Intra group transaction W5 Consolidated Retained earinings

Party Streamer
URP RE at the year end
FV adjustment
RE of parent Dr - URP
Inventory Cr - Unwinding of discount
RE at acquistion
-
Share of subsidiary -
-
W6 Non controlling interest

Fair value of NCI at acquisition

Share of subsidiary
-

Consolidated SOFP as at 30 Sep 20X5

Assets Equity and liabilities
Non Current Assets Share capital 190,000
PPE 476,000 CRE -
Investments - Revaluation surplus 41,400
Goodwill - NCI -
 Non current liab
Current Assets 139,350 Deferred consideration -
Current liabilities 165,450
Total 615,350 Total 396,850

(b)

The individual accounts are more relevant for decision to buy the company as it would reflect the performance of the stream
specifically.

The parent and subsidiary will have related party transactions that needs to be considered as parent may have passed on a lo
benefits to the subsidiary.

In this case the parent is selling goods to the subsidiary at a lower value than the market which will reduce the cost of subsidi
but since the revenue would stay the same the profitability will be increased.

There is a possibility that the party co has deliberately done this in order to increase the value of streamer co so that they can
a better value when they sell the company.

The consolidated statements and the individual statements will not be able to provide the users detailed information about a
of these benefits as further data would be needed to obtain this information.
e performance of the streamer co

rent may have passed on a lot of

will reduce the cost of subsidiary

f streamer co so that they can secure

detailed information about all

Gold Co.

(a) Goodwill (b) SPLOCI for the year ended 30 Sep 20X2

Consideration - shares Revenue

Deferred consideration Cost of sales
FV of NCI Gross profit
- Distribution cost
Fair value of net assets at acquistion Admin cost
Share of profit from assoc.
Share capital Finance cost
Ret earnings Profit before tax
FV adjustment - Plant Tax expense
Contingent liability Profit for the year
-
Profit att: to Parent
Goodwill at acquisition - NCI
Total

Workings ($000)

W1 FV adjustments W3 Convertibe loan

Excess depreciation Inception Proceeds

1st Oct x1 Liability
W2 Intra group transactions Interest
Redemption
Revenue Dr
COS Cr - Equity

COS Dr ACM Opening Int Exp Paid

Inventory Cr - 8% 6%
30 Sep x2

W4 NCI (SOPL) W5 Unwinding

PFY
As per question Unwinding
Excess dep
-
NCI @ 10% -
30 Sep 20X2

-
(6,400)
(6,400)

(6,400)
-
(6,400)

-
-

Closing