PC Bhd. (PC) has been on an acquisition spree over the past five years and is...

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PC Bhd. (PC) has been on an acquisition spree over the past five years and is planning to acquire more companies and list its shares on the Malaysia Stock Exchange of Bursa Malaysia in a few years' time. PC has investments in two companies, Sehati Bhd. (Sehati) and Jaya Bhd. (Jaya). The statements of financial position as at 31 March 2020 of the three companies are as below: ASSETS Non-current assets Property, plant and equipment Investments Current assets Inventories Trade receivables Cash and banks EQUITY AND LIABILITIES Equity Ordinary shares Other components of equity Retained earnings Other liabilities Number of ordinary shares ('000) Details of PC two investments are as follow: PC RM'000 1,284 1,500 2,784 150 50 44 244 3,028 1,500 500 548 2,548 480 3,028 1,500 Sehati RM'000 856 856 40 30 46 116 972 420 160 192832 372 952 20 972 420 Jaya RM'000 500 500 50 60 5 115 615 400 **** 50 105 555 60 615 400 Date of acquisition Percentage holding acquired Purchase consideration Retained earnings at date of acquisition 1. Other components of equity at date of acquisition Non-controlling interest measurement method Impairment of goodwill in 2020 Q1. (Continued) Additional information: 2. 3. 4. Sehati Bhd 1 April 2019 80% RM820,000 RM240,000 RM160,000 Proportionate share of net assets basis RM17,000 Jaya Bhd 1 April 2019 75% RM480,000 RM130,000 RM50,000 Fair value basis RM23,000 PC holds Sehati shares in its financial statements at Fair Value Through Other Comprehensive Income (FVTOCI). The other component of equity includes a fair value gain of RM200,000 from the date of acquisition of Sehati's shares until 1 January 2020. Sehati has internally generated brands which were not recognised in Sehati's own financial statements. An independent expert has valued the brands at RM150,000, with a useful life of five years as at 1 April 2019, the date of acquisition of Sehati by PC. At the date of acquisition, the fair values of the assets, liabilities and contingent liabilities of Sehati and Jaya were equal to their carrying amounts. The fair value of the non-controlling interest at the date of acquisition of Jaya was RM150,000. There had been no impairment of goodwill or investments prior to 1 April 2019. Question : 5. 6. During the year ended 31 March 2020, PC sold goods to Jaya for RM20,000 at cost plus 25%. At the year-end, Jaya still held these goods in its inventories. On 31 March 2020, PC acquired an additional 10% of the ordinary shares of Sehati from the non-controlling interest of Sehati for a cash consideration of RM115,000. PC has not accounted for this in its books. (a) Prepare the consolidated statement of financial position as at 31 March 2020 for PC Bhd. Group in accordance with appropriate Malaysia Financial Reporting Standards. PC Bhd. (PC) has been on an acquisition spree over the past five years and is planning to acquire more companies and list its shares on the Malaysia Stock Exchange of Bursa Malaysia in a few years' time. PC has investments in two companies, Sehati Bhd. (Sehati) and Jaya Bhd. (Jaya). The statements of financial position as at 31 March 2020 of the three companies are as below: ASSETS Non-current assets Property, plant and equipment Investments Current assets Inventories Trade receivables Cash and banks EQUITY AND LIABILITIES Equity Ordinary shares Other components of equity Retained earnings Other liabilities Number of ordinary shares ('000) Details of PC two investments are as follow: PC RM'000 1,284 1,500 2,784 150 50 44 244 3,028 1,500 500 548 2,548 480 3,028 1,500 Sehati RM'000 856 856 40 30 46 116 972 420 160 192832 372 952 20 972 420 Jaya RM'000 500 500 50 60 5 115 615 400 **** 50 105 555 60 615 400 Date of acquisition Percentage holding acquired Purchase consideration Retained earnings at date of acquisition 1. Other components of equity at date of acquisition Non-controlling interest measurement method Impairment of goodwill in 2020 Q1. (Continued) Additional information: 2. 3. 4. Sehati Bhd 1 April 2019 80% RM820,000 RM240,000 RM160,000 Proportionate share of net assets basis RM17,000 Jaya Bhd 1 April 2019 75% RM480,000 RM130,000 RM50,000 Fair value basis RM23,000 PC holds Sehati shares in its financial statements at Fair Value Through Other Comprehensive Income (FVTOCI). The other component of equity includes a fair value gain of RM200,000 from the date of acquisition of Sehati's shares until 1 January 2020. Sehati has internally generated brands which were not recognised in Sehati's own financial statements. An independent expert has valued the brands at RM150,000, with a useful life of five years as at 1 April 2019, the date of acquisition of Sehati by PC. At the date of acquisition, the fair values of the assets, liabilities and contingent liabilities of Sehati and Jaya were equal to their carrying amounts. The fair value of the non-controlling interest at the date of acquisition of Jaya was RM150,000. There had been no impairment of goodwill or investments prior to 1 April 2019. Question : 5. 6. During the year ended 31 March 2020, PC sold goods to Jaya for RM20,000 at cost plus 25%. At the year-end, Jaya still held these goods in its inventories. On 31 March 2020, PC acquired an additional 10% of the ordinary shares of Sehati from the non-controlling interest of Sehati for a cash consideration of RM115,000. PC has not accounted for this in its books. (a) Prepare the consolidated statement of financial position as at 31 March 2020 for PC Bhd. Group in accordance with appropriate Malaysia Financial Reporting Standards.

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