An abridged set of consolidated financial statements for Toggles plc is given below.

Required:

(a) Answer, briefly, the following questions:

1 What is meant by €˜non-controlling interests€™ in both the income statement and the state-ment of financial position?

2 What is meant by €˜goodwill arising on consolidation€™?

3 Why will the €˜retained earnings€™ figure on the consolidated statement of financial position usually be different from the €˜retained earnings€™ as shown in the parent company€™s statement of financial position?

(b) Explain the purposes and advantages in preparing consolidated financial statements for the parent company€™s shareholders.

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Toggles plc Consolidated income statement for the year ended 30 June £m Revenue 172.0 Operating profit 21.2 Тахation (6.4) Profit after taxation 14.8 Non-controlling interests Profit for the year (2.4) 12.4 Consolidated statement of financial position as at 30 June £m ASSETS Non-current assets Property, plant and equipment Intangible asset Goodwill arising on consolidation 85.6 7.2 92.8 Current assets Inventories 21.8 16.4 Trade receivables Cash 1.7 39.9 Total assets 132.7 EQUITY AND LIABILITIES Equity Share capital 100.0 Retained earnings 16.1 116.1 Non-controlling interests 1.3 117.4 Current liabilities Trade payables Total equity and liabilities 15.3 132.7