The following summarised statements of financial position related to the TEALAND group of companies as at 31^st August 2021.

TEA plc LAND Ltd

Non-Current Assets £’ 000 £’ 000

Tangible Assets 45,000 15,000

Investment in LAND 14,000

Current Assets

Inventory 7,600 2,500

Receivables 5,000 400

Cash 3,000 100

Total Assets 74,600 18,000

Equity and Liabilities

Equity

Share Capital (£1 par) 50,000 10,000

Retained Earnings 15,200 2,500

65,200 12,500

Current Liabilities

Payables 9,400 5,500

Total Equity and Liabilities 74,600 18,000

Additional Information

1. TEA plc purchased 7,000,000 shares in LAND Ltd on 1^st September 2020, when LAND’s retained earnings balance was £ 1,500,000.
2. During the year LAND Ltd sold goods to TEA plc, the profit being to TEA Ltd as 30% of the selling price. At the end of the period £500,000 of these goods remained in inventories.
3. An annual impairment review took place and you are informed that you need to write off an impairment loss on goodwill of £ 500,000.
4. The TEALAND group has the policy to value the non-controlling interest at its fair value. The fair value was given as £ 3,000,000.

Note: round figures to whole numbers

Required:

1. Prepare the consolidated statement of financial position for the TEALAND Group for the year ended 31^st August 2021.
2. Write a report to the TEALAND group that identifies how a contingent liability and a contingent asset should be accounted for and/or disclosed.