a. IFRS 10 Consolidated Financial Statements states that there are few ways to ascertain if the...

   

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a. "IFRS 10 Consolidated Financial Statements states that there are few ways to ascertain if the investor 'controls' and 'influences' its investees." Evaluate the statement above with reference to any applicable accounting standard and demonstrate the application of IFRS 10 Consolidated financial statements with the scenario provided below. Further, you must prepare a simplified consolidated statement of financial position as at 31st December 2020 to support your demonstration. Scenario: P acquires 100% of S's ordinary shares for RM1,500,000 on 31st December 2018. S's reserves (consists of only retained earnings) were RM 400,000 at the date of acquisition. The following presents the statement of financial position of both companies as at 31st December 2020. As at 31st Dec 2020 Non-current assets: Property, Plant and equipment Goodwill Investment in S Net current asset Share capital Retained earnings Notes P RM *000 2,000 1,500 300 3,800 300 3,500 3.800 S RM '000 1,000 200 1,200 800 400 1,200 Assuming P omitted certain transactions as illustrated below. You must discuss about the accounting treatment for the omitted (i) and (ii) with reference to any applicable accounting standard. i) ii) P acquired a new warehouse for RM1,000,000 on 1st Jan 2020 with an estimated useful life of 20 years. The factory was brought into use immediately on the same day. The company adopts a cost model for all property, plant and machinery. With a surplus funds of few millions, P invested in a number of commercial lots for RM3,000,000 during the year of 2020. These properties are estimated to have a 20-years of useful life. The market value of these properties stands at RM3,300,000 at the end of December 2020. a. "IFRS 10 Consolidated Financial Statements states that there are few ways to ascertain if the investor 'controls' and 'influences' its investees." Evaluate the statement above with reference to any applicable accounting standard and demonstrate the application of IFRS 10 Consolidated financial statements with the scenario provided below. Further, you must prepare a simplified consolidated statement of financial position as at 31st December 2020 to support your demonstration. Scenario: P acquires 100% of S's ordinary shares for RM1,500,000 on 31st December 2018. S's reserves (consists of only retained earnings) were RM 400,000 at the date of acquisition. The following presents the statement of financial position of both companies as at 31st December 2020. As at 31st Dec 2020 Non-current assets: Property, Plant and equipment Goodwill Investment in S Net current asset Share capital Retained earnings Notes P RM *000 2,000 1,500 300 3,800 300 3,500 3.800 S RM '000 1,000 200 1,200 800 400 1,200 Assuming P omitted certain transactions as illustrated below. You must discuss about the accounting treatment for the omitted (i) and (ii) with reference to any applicable accounting standard. i) ii) P acquired a new warehouse for RM1,000,000 on 1st Jan 2020 with an estimated useful life of 20 years. The factory was brought into use immediately on the same day. The company adopts a cost model for all property, plant and machinery. With a surplus funds of few millions, P invested in a number of commercial lots for RM3,000,000 during the year of 2020. These properties are estimated to have a 20-years of useful life. The market value of these properties stands at RM3,300,000 at the end of December 2020.