On 1 April 2020, Harmony Berhad, a public listed company acquired 120 million of the 150...

  

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On 1 April 2020, Harmony Berhad, a public listed company acquired 120 million of the 150 million issued ordinary shares of Peace Berhad when the retained profit and general reserve of Peace Berhad was RM20 million and RM100 million respectively. The market value of Harmony Berhad's and Peace Berhad's share on 1 April 2020 were RM2.50 and RM3.50 each, respectively. The statements of the financial position of the two companies Harmony Berhad and Peace Bhd as at 31 March 2022 are shown below: Non-current assets Land and building Plant and equipment Investment in Peace Bhd: 120 million Ordinary shares Current assets Inventories Loan to Peace Berhad Trade receivables Bank Total Assets Equity and liabilities Ordinary shares General reserve Retained earnings 10% Debentures Loan from Harmony Debenture interest payables Trade payables Total equity and liabilities Harmony Berhad RM'000 450,000 180,000 400,000 50,000 15,000 65,000 63,000 1,223,000 800,000 160,000 136,000 80,000 8,000 39,000 1,223,000 Peace Berhad RM'000 250,000 160,000 40,000 40,500 65,000 555,500 300,000 100,000 60,000 50,000 13,000 2,500 30,000 555,500 Additional information: 1. Harmony Berhad's policy is to value the non-controlling interest at fair value at the date of acquisition. 2. The fair value of Peace Berhad's other assets and liabilities 1 April 2020 were equal to their carrying amounts with the exception of specialized piece of plant and equipment which had a fair value of RM50 million in excess of its carrying amount. Peace Berhad did not adjust the financial statements to reflect the new value. Both the companies depreciate plant and equipment at 20% using reducing balance method. The carrying amount of the plant and equipment of RM160 million as shown in the statement of financial position of Peace Berhad is after providing current year depreciation charge. Peace Berhad did not dispose or purchase any plant and equipment during the current year. 3. In June 2021, Peace Berhad sold a piece of land costing RM12 million for RM14 million to Harmony Berhad. 4. In December 2021, Harmony Berhad sold goods to Peace Berhad for RM6 million, earning a profit markup of 25% on the sale. Intra group profit in the closing inventory of Peace Berhad was RM2 million. 5. Harmony Berhad still had the full invoice value of RM25 million in its trade receivables at 31 March 2022, however, Peace Berhad's payables only showed RM23 million as it made a payment of RM2 million on 31 March 2022. Required: a. Measure the amount of goodwill on consolidation. b. Prepare the Consolidated Statement of Financial Position of the group as at 31 March 2022 MFRS10 Consolidated Financial Statements. On 1 April 2020, Harmony Berhad, a public listed company acquired 120 million of the 150 million issued ordinary shares of Peace Berhad when the retained profit and general reserve of Peace Berhad was RM20 million and RM100 million respectively. The market value of Harmony Berhad's and Peace Berhad's share on 1 April 2020 were RM2.50 and RM3.50 each, respectively. The statements of the financial position of the two companies Harmony Berhad and Peace Bhd as at 31 March 2022 are shown below: Non-current assets Land and building Plant and equipment Investment in Peace Bhd: 120 million Ordinary shares Current assets Inventories Loan to Peace Berhad Trade receivables Bank Total Assets Equity and liabilities Ordinary shares General reserve Retained earnings 10% Debentures Loan from Harmony Debenture interest payables Trade payables Total equity and liabilities Harmony Berhad RM'000 450,000 180,000 400,000 50,000 15,000 65,000 63,000 1,223,000 800,000 160,000 136,000 80,000 8,000 39,000 1,223,000 Peace Berhad RM'000 250,000 160,000 40,000 40,500 65,000 555,500 300,000 100,000 60,000 50,000 13,000 2,500 30,000 555,500 Additional information: 1. Harmony Berhad's policy is to value the non-controlling interest at fair value at the date of acquisition. 2. The fair value of Peace Berhad's other assets and liabilities 1 April 2020 were equal to their carrying amounts with the exception of specialized piece of plant and equipment which had a fair value of RM50 million in excess of its carrying amount. Peace Berhad did not adjust the financial statements to reflect the new value. Both the companies depreciate plant and equipment at 20% using reducing balance method. The carrying amount of the plant and equipment of RM160 million as shown in the statement of financial position of Peace Berhad is after providing current year depreciation charge. Peace Berhad did not dispose or purchase any plant and equipment during the current year. 3. In June 2021, Peace Berhad sold a piece of land costing RM12 million for RM14 million to Harmony Berhad. 4. In December 2021, Harmony Berhad sold goods to Peace Berhad for RM6 million, earning a profit markup of 25% on the sale. Intra group profit in the closing inventory of Peace Berhad was RM2 million. 5. Harmony Berhad still had the full invoice value of RM25 million in its trade receivables at 31 March 2022, however, Peace Berhad's payables only showed RM23 million as it made a payment of RM2 million on 31 March 2022. Required: a. Measure the amount of goodwill on consolidation. b. Prepare the Consolidated Statement of Financial Position of the group as at 31 March 2022 MFRS10 Consolidated Financial Statements.

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