The following draft group financial statements relate to the Water group Ltd. Consolidated Statement of financial...

 

  
 
 

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The following draft group financial statements relate to the Water group Ltd. Consolidated Statement of financial position as at 30 November ASSETS Non-Current Assets Property plant and equipment Investment property goodwill Other intangible assets Investment in associate Investments in equity instruments Current assets inventories Trade receivables Cash and cash equivalents Total Assets Equity and liabilities Equity attributable to owners of the parent: Share capital Retained earnings Other components of equity Non-controlling interest Total equity Non-Current Liabilities Long term liabilities Long term provisions: pensions and obligation Deferred tax Current liabilities Trade payables Current tax payable Page 13 of 20 2019 NSm 616 327 8 48 85 54 94 399 105 62 232 1015 656 290 351 15 55 711 127 67 25 35 177 144 33 2018 NSm 490 254 6 68 72 . 90 384 128 113 143 874 619 275 324 20 36 655 134 71 22 41 85 5 3 55 30 Water Group Consolidated Statement of Profit or Loss and other comprehensive income for year ended 30 November 2019 Revenue Cost of sales Gross profit Other income Distribution costs Administrative costs Finance costs Gains on property Share of profit of associate Profit before tax Income tax expense Profit for the year Other comprehensive income after tax (items that will not be reclassified through profit or loss) Gain on investment in equity instruments Losses on property revaluation Remeasurement losses on defined benefit pensions plans Other comprehensive income Total comprehensive income Profit attributable to: Owners of the parent Non-controlling interest N$ m 432 (317) 115 25 (55) (36) (6) 10,5 6 59 (11) 48 2 (7) (6) (11) 37 38 10 48 Water Group Ltd Statement of changes in equity for the year ended 30 November 2019 Share capital 275 Balance 01/12/18 Share capital 15 dividends Rights issue acquisitions Total comprehensive income Income for the year Balance 30/11/19 290 Retained Investment Revaluation Total earnings in 324 (5) 1 December 2017 1 January 2019 32 351 equity surplus instruments PPE 16 4 2 6 (7) 9 619 1% 15 (5) 8. 656 Holding 52 60 NCI The following information relates to the financial statements of the Water group Note 1: 36 2 20 10 N$15m N518m 55 On 1 December 2017, Water acquired 8% of the ordinary shares of Tiger Lad. Water Lad had treated this as an investment in equity instruments in the financial statements to 30 November 2018 with changes in fair value taken to profit or loss for the year. There were no changes in fair value in the year to 30 November 2018. On 1 January 2019, Water Lad acquired a further 52% of the ordinary shares of Tigers and gained control of the company. The consideration for the acquisition was as follows Total equity 655 N5m 4 15 (5) 20 30 34 37 711 consideration At January 2019, the fair value of the 8% holding in Tiger held by Water Lad at the t of the business combination was N$5 million and the fair value of the non-controlling interest in Tiger Page 15 of 20 Lid was N$20 million. The purchase consideration at 1 January 2019 comprised cash of N$15 million and shares of N$15 million The fair value of the identifiable net assets of Tigers, excluding deferred tax assets and liabilities, at the date of acquisition comprised the following Property plant and equipment Intangible assets Trade receivables Cash and cash equivalence N87 The tax base of the identifiable net assets of Tigers was N540 million at 1 January 2019. The tex rate of Tigers is 30% Note 2: On 30 September 2019, Tigers made a rights issue on a 1 for 4 basis. The issue was fully subscribed and raised NSS million in cash. Note 3: Water Ltd purchased a research project from a 3 party including certain patents on 1 December 2018 for NS8 million and recognized it as an intangible asset. During the year, Water Lad incurred further costs which included NS2m on completing the research phase NS14m in developing the product for sale and NSI m for the initial marketing costs. There were no other additions to intangible assets in the period other than those on the acquisition of Tigers Lad. Note 4: Water Ltd operates a defined benefit pension scheme. The current service costs for the year ended 30 September 2019 ure N$10 million. Water Ltd enhanced the benefits on 1 December 2018. The total cost of the enhancement is N$2 million, the net interest on net plan assets was NSS million for the year and Water Ltd recognizes re-measurement gains and losses in accordance with IAS 19. Note 5: Water owns an investment property. During the year, part of the heating system of the property, which had a carrying amount of N$0, 5 million, was replaced by a system which cost NS Im. Water uses the fair value model for measuring investment property. Note 6: Water had exchanged surplus land with a carrying amount of NS10 m for cash of NS15m and a plant valued at NS4m. The transaction has commercial substance. Depreciation for the period for property plant and equipment was NS27m. Page 16 of 20 Note 7: Goodwill relating to all subsidiaries had been impairment tested in the year to 30 November 2019 and any impairment accounted for. The goodwill impairment related to those related to those subsidiaries which were 100% owned. Note 8: Deferred tax of NS1 million arose in the year on the gains on investments in equity instruments where the irrevocable election was made to take changes in fair value through other comprehensive income. Note 9: The associate did not pay any dividends in the year. Ignore deferred taxation other than where it is mentioned in the question Required: 3.4 Prepare a consolidated statement of cash flows for the Water group using the 35 indirect method under IAS 7 Statements of Cash flows. The following draft group financial statements relate to the Water group Ltd. Consolidated Statement of financial position as at 30 November ASSETS Non-Current Assets Property plant and equipment Investment property goodwill Other intangible assets Investment in associate Investments in equity instruments Current assets inventories Trade receivables Cash and cash equivalents Total Assets Equity and liabilities Equity attributable to owners of the parent: Share capital Retained earnings Other components of equity Non-controlling interest Total equity Non-Current Liabilities Long term liabilities Long term provisions: pensions and obligation Deferred tax Current liabilities Trade payables Current tax payable Page 13 of 20 2019 NSm 616 327 8 48 85 54 94 399 105 62 232 1015 656 290 351 15 55 711 127 67 25 35 177 144 33 2018 NSm 490 254 6 68 72 . 90 384 128 113 143 874 619 275 324 20 36 655 134 71 22 41 85 5 3 55 30 Water Group Consolidated Statement of Profit or Loss and other comprehensive income for year ended 30 November 2019 Revenue Cost of sales Gross profit Other income Distribution costs Administrative costs Finance costs Gains on property Share of profit of associate Profit before tax Income tax expense Profit for the year Other comprehensive income after tax (items that will not be reclassified through profit or loss) Gain on investment in equity instruments Losses on property revaluation Remeasurement losses on defined benefit pensions plans Other comprehensive income Total comprehensive income Profit attributable to: Owners of the parent Non-controlling interest N$ m 432 (317) 115 25 (55) (36) (6) 10,5 6 59 (11) 48 2 (7) (6) (11) 37 38 10 48 Water Group Ltd Statement of changes in equity for the year ended 30 November 2019 Share capital 275 Balance 01/12/18 Share capital 15 dividends Rights issue acquisitions Total comprehensive income Income for the year Balance 30/11/19 290 Retained Investment Revaluation Total earnings in 324 (5) 1 December 2017 1 January 2019 32 351 equity surplus instruments PPE 16 4 2 6 (7) 9 619 1% 15 (5) 8. 656 Holding 52 60 NCI The following information relates to the financial statements of the Water group Note 1: 36 2 20 10 N$15m N518m 55 On 1 December 2017, Water acquired 8% of the ordinary shares of Tiger Lad. Water Lad had treated this as an investment in equity instruments in the financial statements to 30 November 2018 with changes in fair value taken to profit or loss for the year. There were no changes in fair value in the year to 30 November 2018. On 1 January 2019, Water Lad acquired a further 52% of the ordinary shares of Tigers and gained control of the company. The consideration for the acquisition was as follows Total equity 655 N5m 4 15 (5) 20 30 34 37 711 consideration At January 2019, the fair value of the 8% holding in Tiger held by Water Lad at the t of the business combination was N$5 million and the fair value of the non-controlling interest in Tiger Page 15 of 20 Lid was N$20 million. The purchase consideration at 1 January 2019 comprised cash of N$15 million and shares of N$15 million The fair value of the identifiable net assets of Tigers, excluding deferred tax assets and liabilities, at the date of acquisition comprised the following Property plant and equipment Intangible assets Trade receivables Cash and cash equivalence N87 The tax base of the identifiable net assets of Tigers was N540 million at 1 January 2019. The tex rate of Tigers is 30% Note 2: On 30 September 2019, Tigers made a rights issue on a 1 for 4 basis. The issue was fully subscribed and raised NSS million in cash. Note 3: Water Ltd purchased a research project from a 3 party including certain patents on 1 December 2018 for NS8 million and recognized it as an intangible asset. During the year, Water Lad incurred further costs which included NS2m on completing the research phase NS14m in developing the product for sale and NSI m for the initial marketing costs. There were no other additions to intangible assets in the period other than those on the acquisition of Tigers Lad. Note 4: Water Ltd operates a defined benefit pension scheme. The current service costs for the year ended 30 September 2019 ure N$10 million. Water Ltd enhanced the benefits on 1 December 2018. The total cost of the enhancement is N$2 million, the net interest on net plan assets was NSS million for the year and Water Ltd recognizes re-measurement gains and losses in accordance with IAS 19. Note 5: Water owns an investment property. During the year, part of the heating system of the property, which had a carrying amount of N$0, 5 million, was replaced by a system which cost NS Im. Water uses the fair value model for measuring investment property. Note 6: Water had exchanged surplus land with a carrying amount of NS10 m for cash of NS15m and a plant valued at NS4m. The transaction has commercial substance. Depreciation for the period for property plant and equipment was NS27m. Page 16 of 20 Note 7: Goodwill relating to all subsidiaries had been impairment tested in the year to 30 November 2019 and any impairment accounted for. The goodwill impairment related to those related to those subsidiaries which were 100% owned. Note 8: Deferred tax of NS1 million arose in the year on the gains on investments in equity instruments where the irrevocable election was made to take changes in fair value through other comprehensive income. Note 9: The associate did not pay any dividends in the year. Ignore deferred taxation other than where it is mentioned in the question Required: 3.4 Prepare a consolidated statement of cash flows for the Water group using the 35 indirect method under IAS 7 Statements of Cash flows.

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Q2 Cash Flow Investing Activities Purchase of Property Plan and equipment 3 a Acquisi... View the full answer