This question concerns an associated company making a loss and possible impairment of goodwill.
Hyson plc acquired a 30% interest in the ordinary shares of Green plc on 1 January 20X3 when Green's general reserve was £25,000 and its retained earnings were £40,000.
In the year ended 31 December 20X8 Green made a loss after tax of £65,000 because of a recession in its principal sales market.
The statements of financial position of Hyson plc and Green plc at 31 December 20X8 are as follows:

The statements of income of Hyson and Green for the year ended 31 December 20X8 are:

Because of the losses of Green in 20X8, the recoverable amount of a 30% interest in Green is £40,000 at 31 December 20X8.
Required:
(a) Prepare a consolidated statement of financial position of Hyson plc as at 31 December 20X8.
(b) Prepare a consolidated statement of income of Hyson plc, including the associated company Green, for the year ended 31 December 20X8.
(c) State the changes to your answers in (a) and (b) above if the recoverable amount of a 30% interest in Green was £65,000.

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Hyson £ Green £ ASSETS Non-current assets: 650,000 Property, plant and equipment Depreciation 230,000 (310,000) 340,000 (105,000) 125,000 90,000 Investment in Green Current assets: Inventories 145,000 64,000 Trade receivables 180,000 5,000 25,000 355,000 85,000 Current account – Green Bank 3,000 Total current assets 152,000 Total assets 785,000 277,000 EQUITY AND LIABILITIES £l ordinary shares 300,000 200,000 General reserve 60,000 30,000 225,000 585,000 Retained earnings (57,000) 173,000 Current liabilities: Trade payables Taxation payable Current account – Hyson 163,000 99,000 37,000 5,000 785,000 Total equity and liabilities 277,000 1,045,000 683,000 362,000 42,000 Sales 350,000 Cost of sales Gross profit Distribution expenses Administration expenses Profit/(loss) before tax Income tax expense Profit for the period Dividend paid (shown in equity) 30,000 20,000 152,000 168,000 33,000 (65,000) (65,000) 135,000 40,000