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Consolidation Introduction

1. The document provides consolidation workings and financial statements for company A and its subsidiaries B and C for the year ended September 30, 2015. It includes adjustments for revaluation surplus, depreciation understatement, intragroup transactions, unrealized profit, intragroup balances, goodwill, non-controlling interests, and the investment in associate. 2. The consolidated income statement shows total revenue of $12.7 billion, profit for the year attributable to the parent of $4.4 billion, and earnings per share of $1.69. 3. The consolidated statement of financial position lists non-current assets of $12.9 billion including goodwill and investments, current assets of $19

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12 views5 pages

Consolidation Introduction

1. The document provides consolidation workings and financial statements for company A and its subsidiaries B and C for the year ended September 30, 2015. It includes adjustments for revaluation surplus, depreciation understatement, intragroup transactions, unrealized profit, intragroup balances, goodwill, non-controlling interests, and the investment in associate. 2. The consolidated income statement shows total revenue of $12.7 billion, profit for the year attributable to the parent of $4.4 billion, and earnings per share of $1.69. 3. The consolidated statement of financial position lists non-current assets of $12.9 billion including goodwill and investments, current assets of $19

Uploaded by

Barack Mike
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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REVISION ON CONSOLIDATED FINANCIAL STATEMENTS

Workings:
1 Group structure
A ltd Parent Acquistion dates
B Ltd Subsidiary 80% 20%=NCI 1-Jan-15
C Ltd Associate 40% 1-Oct-14

2 Revaluation surplus by Subsidiary on Acquisition 210 (Add to PPE and Equity)

3 Depre' Understm by B ltd= Depreciation in R. Surplus 31.5 (Minus from profit & PPE)

4 Intra- grp sales 140 (Minus from Grp sales and COS)

5 Unrealised profit(UPS) on C/Stock, By seller(B Ltd) = Profit in remainder


Profit margin 0.14285714 a/(b+a)
Mark up 50 3 16.6666667 a/b
100
UPS is accounted for by Minusing from PROFIT & C/STOCK

6 Intra- grp balance/indebtness to eliminate= 80 (Btw Parent and Subsidiary only bcoz such debt is
Fake)
(Minus from Rec' AND Pay') Do not eliminate what invloves Asso' Or J.V
bcoz we do not consolidate them.

7 Goodwill on acquisition of B Ltd and C Ltd NA=+equity items


B Ltd C Ltd
Purchase consideration 3430 700
Less: N.A Acquired:
Ordinary shares 1600 400
Share premium 300 0
Retained profits 1452 1990 1250
Rev' surplus 210 0
4100 -3280 1650 -660
Goodwil Parent's (Partial goodwill) 150 40
NCI's 800 -20 NCI's FV-NCI's proportion in NA of subsid'
Full Goodwill 130 Capitalize=Asset

Impairment (Expense) 32.5 4

8 Value of NCI to CBS as equity


Ordinary shares 1600
Share premium 300
Retained profits 3604 3562.5
Rev' surplus 210
Total NA 5,672.50
Proportion of NCI 1,134.50
NCI's goodwill (20.00)
NCI to B/sheet 1,114.50 (Equity)

9 Value of Investment in Associate to CBS

Cost of investment = Purch' Consider' 700


Add: Investor's share in post acquisition increase in
NA of Associate: Incre
R.Profits 3138 1250 1888 755.2
Less: Goodwilll impairment in associate -4
Investment in Associate to CBS 1451.2

10 A Ltd B Ltd C Ltd


R.P b/f 7612
Profit for the period 2425
Dividends paid -1800
R.P c/f 9in B/SHEET) 8237

a) A GROUP
INCOME STATEMENT FOR THE YEAR TO 30 SEPTEMBER 2015
Sh. 'm'
Revenue 9120 12,685.00
COS 3610 4,330.50
Gross profit 8,354.50
Distribn cost 665 986.00
Admin expenses 695 822.50
Finance cost 65 80.00
Goodwill impairment 36.50
PBT 6,429.50
Income tax expense 1660 2,468.50
PAT 3,961.00
NCI's share in PAT of subsidiary 2152 (314.50)
Share in PAT of Associate 1888 755.20
Profit for the year attributable to parent only 4,401.70

b) A GROUP
STATEMENT OF CHANGES IN EQUITY FOR THE YEAR TO 30 SEPTEMBER 2016
Ordinary Share Retained Total
Shares Premium Profits
Bal' b/f (Parent's) 2,600.00 1,500.00 7,612.00 11,712.00
profits for the year - - 4,401.70 4,401.70
Dividends - - (1,800.00) (1,800.00)
Bal' c/f 2,600.00 1,500.00 10,213.70 14,313.70

c) A GROUP
STATEMENT OF FINANCIAL POSITION AS AT 30 SEPTEMBER 2016
Sh. 'm'
Non current Assets
PPE 6096 11,129.50 Investm 4350
Goodwill in B Ltd 97.5 97.50
Investment in C Ltd 1,451.20
Other investments 270.00
12,948.20
Current Assets
Inventory 1460 2,303.00
Accounts Receivable 1880 2,565.00
Cash 1224 1,411.00
19,227.20
Equity
Ordinary Shares 2,600.00
Share Premium 1,500.00
Retained Profits 10,213.70
NCI 1,114.50
15,428.20
Non-current liabilibilities
Loan 650 850.00
Current liabilities
Trade payables 1463 2,029.00
Current tax 560 920.00
19,227.20
Endof Yr Months to consolidate
30-Sep-15 9months
30-Sep-15 Whole year

o PPE and Equity)

(Minus from profit & PPE)

10

sidiary only bcoz such debt is

at invloves Asso' Or J.V


olidate them.

rtion in NA of subsid'
Subsid 3430
Assoc 700
Others 220

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