The following are the summarised statements of financial position for Van plc and Car ltd as at
Question:
The following are the summarised statements of financial position for Van plc and Car ltd as at 31st December 2020, the end of their most recent accounting periods.
Statements of financial position as at 31st December 2020
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Additional Information:
- Van plc acquired 450m shares in Car ltd 2 years ago. At that date the retained earnings of Car ltd amounted to £200m
- At the date of acquisition, the fair value of Car ltd’s assets were the same as their carrying values with the exception of their PPE. The PPE had a fair value of £1,200m. The remaining useful life of the equipment at the date of acquisition was 4 years.
- The group uses the FV method to value the NCI. The FV of the NCI at acquisition was valued at £300m.
- Goodwill on acquisition has since been impaired by 20%.
Required:
- Determine the group structure
(2 marks)
- Calculate the net assets of the subsidiary at the date of acquisition and at the reporting date
(6 marks)
- Calculate goodwill at the reporting date
(5 marks)
- Calculate the non-controlling interest at the reporting date
(3 marks)
- Calculate group retained earnings at the reporting date.
(3 marks)
- Prepare a consolidated statement of financial position for Van group as at 31st December 2020 (you should ensure all workings are shown).
(13 marks)
- Explain what is meant by the term ‘control’ in accordance with IFRS 10 Consolidated Financial Statements
(3 marks)
International Financial Reporting A Practical Guide
ISBN: 978-1292200743
6th edition
Authors: Alan Melville