$578$

Chapter $15$

$15\mathrm{.}9$

The folowing draft statements of financial position relate to McHill. McTall and McZon, all public limited compergiof as at $31$ December $4.$

The following information is relevant to the preparation of the group financial statements:

a$.$ McHill acquired $80$ percent of the ordinary share capital of McTall and $30$ percent of the ordinary share captal of McZen on $1$ January $4$ in a share exchange when the accumulated reserves of McTall were RM$20$ milion and that of McZen were RM$22$ million. The fair values of the net assets at $1$ January $4$ were RM$190$ milion RM$65$ million and RM$60$ million for McHill, McTall and McZen, respectively. Any increase in the conscidated fair value of the net assets over the carrying value is deemed attributable to unrecognised intangibles held by the companies, and in addition for McTall the fair value of the investment in McZen. These intangibles have an economic ife of five years as at $1$ January $4.$ There has been no new issue of shares since $1$ Januaryx$4.$

b$.$ McTall had acquired a $40$ percent holding in McZen on $1$ January $2$ for a consideration of RM$15$ million when the accumulated reserves of McZen were RM$10$ million. These investments are carried at cost by McTal but had a fair value of RM$30$ million on $1$ January $4,$ which is included in the fair value of the net assets of McTall of RM$65$ milion on $1$ January $4($see above$).$

c$.$ McHill purchased a $40$ percent interest in McMini, a limited liability investment company, on $1$ January x$4.$ The only asset of the company is a portfolo of investments which is held for trading purposes. The stake in McMini was purchased for RM$9$ million cash. The carrying value of the net assets of McMini on $1$ January $x^4$ was FJM$24$ million and their fair value was RM$24$ million too. On $31$ December $4,$ the fair value of the nel assets was RM$25$ million, McHill exercises significant influence over McMini. The recoverable amount of the irvestment was measured at RM$9\mathrm{.}8$ milion as at $31$ December $4.$

d$.$ McTall has recognised a brand and included this in its intangible non$-$current assets at a cost of RM$5$ milion The recoverable amount of the brand at $31$ December $4$ was RM$3\mathrm{.}5$ million. The fair value of the brand at the time of McTall's acquisition by McHill was RM$5$ million. The development expenditure was classified as having an indefinite life.

e$.$ Both McTall and McHill are the investors in the $10$ percent loan stock of McZen. McZen has provided for the second half$-$year's interest on the loan stock which has been accrued in the current liabilities of McZen but has not been recognised by the investors.

Required:

Prepare the consolidated statement of financial position of the McHill Group for the year ended $31$ December x$4.$