Section A (compulsory) Answer all questions On 31 December 20X3, Investor plc held the following two investments: 1-90% of the ordinary shares of A pic. The shares had been purchased by Investor pic at a cost of 130 million on 31 March 20X1, when A plc's shareholders' equity comprised share capital of 7 million and retained eamings of 87 million. Investor plc measures the non-controlling interest in A plc using the share of net assets method 2, 30% of the ordinary shares of B pic. The shares had been purchased by Investor plc at a cost of 50 million on 30 June 20X3, when B plc's shareholders' equity comprised share capital of 12 million and retained eamings of 121 million. Investor plc has exercised significant influence on B plc since 30 June 20X3. Investor plc purchases various services from both A pic and B plc; some of the related payments were outstanding on 31 December 20X3. The statements of financial position of Investor plc, A pic and B plc are provided Statements of financial position at 31 December 20x3 Investor A plc Amounts in millions Cash 15 10 12 Receivables from Investor plc Other receivables Investment in A plc Investment in B plc Property and equipment Total Assets Payables to A plc 0 90 32 130 0 110 160 170 140 455 Payables to B plc Other payables Share Capital Retained Earnings 0 42 10 389 Total Liabilities and Equity455 25 7 128 160 12 136 206 (Continued on the following page) Page 2 of 7 Required: a) Prepare Investor plc's consolidated statement of financial position at 31 December 20x3, explaining the relevant IFRS rules and principles 24 marks b) Explain the meaning of significant influence according to IFRS and (note that marks are allocated for t these explanations) Show all workings provide two examples of circumstances which may be used as evidence that Investor plc exercises significant influence over B plc. 6 marks Total-30 marks) Section A (compulsory) Answer all questions On 31 December 20X3, Investor plc held the following two investments: 1-90% of the ordinary shares of A pic. The shares had been purchased by Investor pic at a cost of 130 million on 31 March 20X1, when A plc's shareholders' equity comprised share capital of 7 million and retained eamings of 87 million. Investor plc measures the non-controlling interest in A plc using the share of net assets method 2, 30% of the ordinary shares of B pic. The shares had been purchased by Investor plc at a cost of 50 million on 30 June 20X3, when B plc's shareholders' equity comprised share capital of 12 million and retained eamings of 121 million. Investor plc has exercised significant influence on B plc since 30 June 20X3. Investor plc purchases various services from both A pic and B plc; some of the related payments were outstanding on 31 December 20X3. The statements of financial position of Investor plc, A pic and B plc are provided Statements of financial position at 31 December 20x3 Investor A plc Amounts in millions Cash 15 10 12 Receivables from Investor plc Other receivables Investment in A plc Investment in B plc Property and equipment Total Assets Payables to A plc 0 90 32 130 0 110 160 170 140 455 Payables to B plc Other payables Share Capital Retained Earnings 0 42 10 389 Total Liabilities and Equity455 25 7 128 160 12 136 206 (Continued on the following page) Page 2 of 7 Required: a) Prepare Investor plc's consolidated statement of financial position at 31 December 20x3, explaining the relevant IFRS rules and principles 24 marks b) Explain the meaning of significant influence according to IFRS and (note that marks are allocated for t these explanations) Show all workings provide two examples of circumstances which may be used as evidence that Investor plc exercises significant influence over B plc. 6 marks Total-30 marks)