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The statements of financial position of P AG and S AG as at 31.12.2020 are as follows: P AG S AG Non-current assets Property,

 

The statements of financial position of P AG and S AG as at 31.12.2020 are as follows: P AG S AG Non-current assets Property, plant and equipment Investment in S AG 6,910 1.400 8,310 3,110 11,420 1,640 1,120 2,760 Current assets Equity Ordinary share capital Retained earnings 500 4,000 5.380 9,380 1.550 2,050 Liabilities Current liabilities 2,040 11,420 710 2,760 The following information is available: P AG acquired 70% of the share capital of S AG on 31 May 2012. There have been no changes in the share capital of S AG since that date. On 31 May 2012, the fair value of the non-current assets of S AG was 150,000 higher than their book value on that date. This valuation has not been reflected in the books of S AG. On 31 May 2012, the retained earnings of S AG were 850,000. Goodwill has suffered no impairment since 31 May 2012. Any depreciation consequences of the fair value adjustments may be ignored. a) Prepare a consolidated statement of financial position as at 31.12.2020, assuming the non- controlling interest in S AG is to be measured at the appropriate proportion of that company's identifiable net assets. b) Explain how this consolidation statement would be modified if the non-controlling interest in SAG on acquisition was measured at fair value and this fair value was determined by P AG to be 530,000 .

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a In the books of P AG Consolidated Statement of Financial Position as on 31122020 Particulars Notes Amount EQUITY AND LIABILITY Shareholders funds Share Capital 1 4000000 Retained Earnings WN4 587000... blur-text-image

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