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ANSWER ALL QUESTIONS QUESTION 1: (50 MARKS) Note 1 - Port Louis Ltd's investments On 1 April 2012, Port Louis Lid acquired 400 million ordinary shares of St Croix Ltd when the retained earnings were MUR 100 million and fair value of net assets were MUR 710 million The difference between the fair value of the net assets and their carrying amount was due to items of non-depreciable property, plant and equipment. On 1 April 2013, Port Louis Ltd bought 40% shares in St Martin Ltd. The retained earnings of St. Martin on that date were MUR50 million and those of St. Croix were MUR 150 million There was no revaluation surplus in the books of St. Martin on 1 April 2013 and the fair values of the net assets of Line at April 2013 were not materially different from their carrying values PART A: (44 MARKS) You are the Group Financial Reporter at Port Louis Ltd, an investment holding , company, which has investments in shares in St. Croix Ltd, and St. Martin Ltd. You are given the following draft statements of financial position as at 31 July 2019 to consolidate: Port Louis St. Croix St. Martin MUR MUR MUR Notes million million million ASSETS Non-current assets Property, plant and equipment 1,230 505 256 Investment - St. Croix 640 Investment - St. Martin 160 100 Current assets 630 290 194 TOTAL ASSETS 2.660 895 450 EQUITY AND LIABILITIES EQUITY Share capital at MUR1 each 1,500 500 200 Share premium 300 100 Revaluation surplus Retained earnings 625 200 TOTAL EQUITY 2,425 800 380 LIABILITIES Liabilities 235 95 Total liabilities 235 95 TOTAL EQUITY AND LIABILITIES 2,660 895 450 Late during the current financial year, some key customers cancelled their contracts with the St. Croix Ltd. The directors of Port Louis Ltd expect that these events will continue to have an adverse impact on SL Croix Lid operations and the goodwill acquired. The directors estimate that it would be appropriate to impair a third of goodwill acquired 1 aaa less Note 2 - St. Croix Ltd's investments Port Louis Ltd and SL Croix Ltd had acquired their holdings in St. Martin on the same date as part of an attempt to mask the true ownership of Line, St Croix Ltd acquired 25% of the ordinary shares of St Martin Ltd. The information on the net assets of SL Martin Ltd given under note 1 above is relevant Note 3 - Non-controlling interest It is the group's policy to value the non-controlling interest at its proportionate share of the fair value of the subsidiary's identifiable net assets. ANSWER ALL QUESTIONS QUESTION 1: (50 MARKS) Note 1 - Port Louis Ltd's investments On 1 April 2012, Port Louis Lid acquired 400 million ordinary shares of St Croix Ltd when the retained earnings were MUR 100 million and fair value of net assets were MUR 710 million The difference between the fair value of the net assets and their carrying amount was due to items of non-depreciable property, plant and equipment. On 1 April 2013, Port Louis Ltd bought 40% shares in St Martin Ltd. The retained earnings of St. Martin on that date were MUR50 million and those of St. Croix were MUR 150 million There was no revaluation surplus in the books of St. Martin on 1 April 2013 and the fair values of the net assets of Line at April 2013 were not materially different from their carrying values PART A: (44 MARKS) You are the Group Financial Reporter at Port Louis Ltd, an investment holding , company, which has investments in shares in St. Croix Ltd, and St. Martin Ltd. You are given the following draft statements of financial position as at 31 July 2019 to consolidate: Port Louis St. Croix St. Martin MUR MUR MUR Notes million million million ASSETS Non-current assets Property, plant and equipment 1,230 505 256 Investment - St. Croix 640 Investment - St. Martin 160 100 Current assets 630 290 194 TOTAL ASSETS 2.660 895 450 EQUITY AND LIABILITIES EQUITY Share capital at MUR1 each 1,500 500 200 Share premium 300 100 Revaluation surplus Retained earnings 625 200 TOTAL EQUITY 2,425 800 380 LIABILITIES Liabilities 235 95 Total liabilities 235 95 TOTAL EQUITY AND LIABILITIES 2,660 895 450 Late during the current financial year, some key customers cancelled their contracts with the St. Croix Ltd. The directors of Port Louis Ltd expect that these events will continue to have an adverse impact on SL Croix Lid operations and the goodwill acquired. The directors estimate that it would be appropriate to impair a third of goodwill acquired 1 aaa less Note 2 - St. Croix Ltd's investments Port Louis Ltd and SL Croix Ltd had acquired their holdings in St. Martin on the same date as part of an attempt to mask the true ownership of Line, St Croix Ltd acquired 25% of the ordinary shares of St Martin Ltd. The information on the net assets of SL Martin Ltd given under note 1 above is relevant Note 3 - Non-controlling interest It is the group's policy to value the non-controlling interest at its proportionate share of the fair value of the subsidiary's identifiable net assets