Tutorial 4

Consolidated Statement of Financial Position

Suggested answer

Question 1

I-Whale Bhd.
Consolidated statement of financial position as at 31 March 2022

I-Whale Dolphin Adjustments Group

ASSETS RM'000 RM'000 RM'000 RM'000 RM'000
Non-current assets
74,40
Property, P&E 288,600 361,302
0 (7,700) 1,300

1,418 (217)

4,700 (1,200)
Investment Property 75,400 92,200
16,800
Investments 34,200 20,484
5,100 66,232 (85,048)
Goodwill (W1) 4,942
96,30
398,200 478,928
0
Current assets
11,20
Inventories 22,000 32,858
0 (342)
7,70
Trade and other receivables 19,400 26,550
0 (130) (420)
1,50
Bank and cash balances 2,800 4,430
0 130
20,40
44,200 63,838
0

116,70
Total assets 442,400 542,766
0

EQUITY AND LIABILITIES

Equity
82,60
Ordinary shares 270,000 336,232
0 66,232
Preference shares 75,600 - 75,600
11,20
Revaluation reserve (W2) 35,600 40,804
0
9,60
Retained earnings (W3) 27,900 27,140
0
103,40
409,100 479,776
Shareholders’ equity 0

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NCI (W4) 16,810
496,586
Non-current liabilities
5,60
Loan notes 11,200 16,800
0
70
Deferred tax liability 4,700 5,400
0
6,30
15,900 22,200
0

Current liabilities
4,20
Trade and other payables 16,600 20,380
0 (420)
2,80
Tax payables 800 3,600
0
7,00
17,400 23,980
0

116,70
Total equity and liabilities 442,400 542,766
0

Workings:
(W1) Goodwill
RM'000

Consideration transferred 18,816 66,232 85,048

[(64,000 x 84% x RM0.35) + (64,000 x 84% x 2/5 x RM3.08)]
NCI at acquisition (64,000 x 16% x RM1.64) 16,794
101,842
FV of NA at date of acquisition
Share capital 82,600
Pre-acquisition RR 9,400
Pre-acquisition retained earnings 8,500
Fair value adjustments
- Plant (17,300 - 25,000) (7,700)
- Machinery (14,800 - 13,500) 1,300
94,100

7,742
Impairment loss on goodwill (2,800)
4,942

(W2) Consolidated Revaluation reserve

I-Whale Dolphin
RM'000 RM'000
Per SOFP 35,600 11,200
Pre-acquisition RR (9,400)
Revaluation surplus / deficit on PPE 4,700 (1,200)
40,300 600
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Share of:
Dolphin (600 x 84%) 504
40,804

(W3) Consolidated Retained earnings

I-Whale Dolphin
RM'000 RM'000
Per SOFP 27,900 9,600
Pre-acquisition retained earnings (8,500)
Reduction in depreciation on FV adj for plant (7,700 x 7/38 mths) 1,418
Additional depreciation of FV adj for machinery (1,300 x 7/42 mths) (217)
AURP on sales of goods (5,300 x 24/124 x 1/3) (342)
27,558 2,302
Share of:
Dolphin (2,302 x 84%) 1,933
Impairment loss on goodwill (2,800 x 84%) (2,352)
27,140

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(W4) Non-controlling interest
RM'000
NCI at acquisition (W1) 16,794
NCI share of post-acq RR (600 x 16%) 96
NCI share of post-acq RE (2,302 x 16%) 368
Impairment loss on goodwill (2,800 x 16%) (448)
16,810

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Question 2

Apple-pie Bhd
Consolidated statement of financial position as at 31 March 2022

Apple-pie Cheesecake Adjustments Group

ASSETS RM'000 RM'000 RM'000 RM'000 RM'000
Non-current assets
Property, P&E 278,500 134,200 413,874
1,500 (326)
Financial asset EIs 21,500 - 14,800
(6,700)
Investments 12,200 1,700 67,807 16,898 2,796

(95,809)
Goodwill (W1) 955
312,200 135,900 432,424
Current assets
Inventories 14,400 4,700 (140) 18,960
Trade receivables 9,700 5,500 14,230
(420) (550)
Bank 2,500 900 420 3,820
26,600 11,100 37,010

Total assets 338,800 147,000 469,434

EQUITY AND LIABILITIES

Equity
Ordinary shares 255,400 97,000 67,807 323,207
OCE (W2) 24,500 17,800 19,362
Retained earnings (W3) 32,050 22,350 33,529
Shareholders’ equity 311,950 137,150 376,098

NCI (W4) 40,288

416,386
Non-current liabilities
Long-term loan 15,400 1,300 16,700
4.6% Debentures 16,898 16,898
Deferred tax 450 250 700
15,850 1,550 34,298

Current liabilities
Trade payables 9,600 7,700 (550) 16,750
Current tax payables 1,400 600 2,000
11,000 8,300 18,750

Total equity and liabilities 338,800 147,000 469,434

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Workings:
(W1) Goodwill
11,104 RM'000

Consideration transferred 67,807 16,898 95,809

[(48,280 x RM0.23) + (48,280 x 4/9 x RM3.16) + (48,280 x RM350/1,000)]
NCI at FV (68,000 x 29% x RM1.98) 39,046
134,855
FV of NA at date of acquistion
Share capital 97,000
Pre-acquisition OCE 15,600
Pre-acquisition RE 17,300
Fair value adjustments 1,500
131,400

3,455
Impairment loss on goodwill (2,500)
955

(W2) Other components of equity

Apple-pie Cheesecake
RM'000 RM'000
Per SOFP 24,500 17,800
Pre-acquisition OCE (15,600)
FV gain on IEI (6,700)
17,800 2,200
Share of:
Cheesecake (2,200 x 71%) 1,562
19,362

(W3) Consolidated Retained earnings

Apple-pie Cheesecake
RM'000 RM'000
Per SOFP 32,050 22,350
Pre-acquisition retained earnings (17,300)
Additional depreciation on FV adj for plant (1,500 x 5/23 mths) (326)
AURP on sales of goods (7,500 x 23/123 x 10%) (140)
32,050 4,584
Share of:
Cheesecake (4,584 x 71%) 3,254
Impairment loss on goodwill (2,500 x 71%) (1,775)
33,529

(W4) Non-controlling interest

RM'000
NCI at acquisition (W1) 39,046
NCI share of post-acq OCE (2,200 x 29%) 638
NCI share of post-acq RE (4,584 x 29%) 1,329
Impairment loss on goodwill (2,500 x 29%) (725)
40,288

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Question 3
Frederic Bhd.
Consolidated Statement of financial position as at 28 February 2021

Frederi
c Chopin Adjustments Total
RM'000 RM'000 RM'000 RM'000 RM'000
ASSETS
Non-current assets

PPE 374,150 145,400 2,780 (12,400) 522,665

14,820 (2,085)

Intangible assets 23,250 9,440 (2,360) 30,330

Investment in subsidiary 135,720 - (135,720) -

Investment in Associate (W2) 84,800 94,536

IEI - 12,500 (2,080) 10,420

Goodwill (W1) 17,335
617,920 167,340 675,286

Current Assets

Inventories 32,500 15,400 (302) 750 48,168

(180)
Trade and other receivables 14,800 8,820 23,620
Cash and bank 9,330 780 10,110
56,630 25,000 81,898

674,550 192,340 757,183

E&L
Equity
Ordinary shares 330,500 140,000 330,500
OCE (W3) 124,000 25,500 138,830
RE (W4) 181,490 17,810 192,323
Total equity 635,990 183,310 661,652

NCI (W5) 47,191

Non-current liabilities
9.5% Loan notes 24,700 - 24,700
Deferred tax 6,520 3,250 9,770
31,220 3,250 34,470

Current Liabilities
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Trade and other payables 5,360 4,140 750 10,250
Tax payable 1,980 1,640 3,620
7,340 5,780 13,870

674,550 192,340 757,183

Workings:
(W1) Goodwill (Chopin)
RM'000
Consideration transferred 135,720
(48,000 x 74% x 4/7 x RM6.57) + (48,000 x 74% x RM100/1,500)

NCI at acquisition (159,980 x 26%) 41,595

177,315

Less : Net assets at date of acquisition

Share capital 140,000
Pre-acquisition other components of equity 18,200
Pre-acquisition retained earnings 11,400
(9,620
Fair value adjustment (2,780 - 12,400) )
159,980

17,335

(W2) Investment in associate (Wagner)

RM'000
Cost of investment 84,800
Share of post-acquisition profit (64,560 x 21%) 13,558
(3,822
Dividend received (18,200 x 21%) )
94,536

(W3) Consolidated Other Components of equity

Frederic Chopin
RM'000 RM'000
Per BS 124,000 25,500
(18,200
Pre-acquisition other components of equity )
Revaluation surplus on land 14,820
(2,080
Decrease in FV of IEI (12,500 - 10,420) )
124,000 20,040
Share of:
Chopin (20,040 x 74%) 14,830

8
 138,830

9
(W4) Consolidated Retained Earnings
Frederic Chopin
RM'000 RM'000
Per BS 181,490 17,810
(11,400
Pre-acquisition retained earnings )
Additional depreciation on revaluation of plant (2,780 x 6/8 (2,085
years) )
(2,360
Amortisation of intangible asset (9,440 x 25%) )
Allowance for URP on closing inventory (3,150 x 4 x 24% x (302
1/10) )
(180
Allowance for URP on closing inventory (750 x 24%) )
181,490 1,483
Share of:
Chopin (1,483 x 74%) 1,097
Share of profit of associate [(64,560 - 18,200) x 21%] 9,736
192,323

(W5) Non-controlling interest (Chopin)

RM'000
NCI at acquisition (W1) 41,595
NCI share of post-acquisition OCE (20,040 x 26%) 5,210
NCI share of post-acquisition RE (1,483 x 26%) 385
47,191

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