Required:

Prepare the consolidated income statement for the AZ Group for the year ended 30 September 2012.Calculate the goodwill that will appear in the consolidated statement of financial position of the AZ Group as at 30 September 2012

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AZ acquired 80% of the ordinary share capital of B on 1 January 2010 for R800 million. The group's policy is to value non-controlling interest at fair value at the date of acquisition. On 1 January 2010 the non-controlling interest of B had a fair value of R200 million. B acquired 60% of the ordinary share capital of C on 1 January 2011 for R480 million. At 1 January 2011 the fair value of the non-controlling interest in C, included in the consolidated financial statements of AZ, was R280 million. The fair value of the net assets of the acquired entities was as follows: 1 January 2011 R million 977 620 Net assets of B Net assets of C 1 January 2010 R million 940 570 Notes: 1. The fair values of the net assets of B and C at their dates of acquisition by AZ were deemed to be the same as their book values. AZ acquired 80% of the ordinary share capital of B on 1 January 2010 for R800 million. The group's policy is to value non-controlling interest at fair value at the date of acquisition. On 1 January 2010 the non-controlling interest of B had a fair value of R200 million. B acquired 60% of the ordinary share capital of C on 1 January 2011 for R480 million. At 1 January 2011 the fair value of the non-controlling interest in C, included in the consolidated financial statements of AZ, was R280 million. The fair value of the net assets of the acquired entities was as follows: 1 January 2011 R million 977 620 Net assets of B Net assets of C 1 January 2010 R million 940 570 Notes: 1. The fair values of the net assets of B and C at their dates of acquisition by AZ were deemed to be the same as their book values.

Answer rating: 100% (QA)

SOLUTION To prepare the consolidated income statement for the AZ Group for the year ended 30 September 2012 we need to combine the income statements o... View the full answer