Chapter-- 18 Consolidated statement of financial position

Illustration 1
Consolidated statement of financial position at 31 december 20x4 Workings
Non current assets (60+50) 110 W1 Group structure
Current assets (40+40) 80 P
190 acquired 100% on 31st decem
S
Share capital 100
Retained earnings 30 W2
Current liabilities 60
190

Test your understanding 1

Consolidated statement of financial position as at 31 December 20x8 Workings
$ W1 Group structure
Non Current assets Dickens
Property, plant & equipment (85000+18000) 103000 Acquired 80% 16000/20000
Goodwill 22500 jones
Current assets (160000+84000) 244000
369500 W2 Net asset of jones
Equity Particulars
Share capital 65000 Share capital
Share premium 35000 retained earnings
Retained earnings 74000 Share premium
NCI 13500
Current liabilities (135000+47000) 182000 W3 Goodwill
369500 Investment
W5 Group Retained Earnings Non controlling interest
Dickens 70000 Fair value of net asset at acq
80% of jones in post acqn (5000*80%) 4000 Goodwill at acqn
74000
W4 Non Controlling Interest
NCI share in acqn
NCI share in post acqn (5000

Test your understanding 2

Particulars Proportion method Fair value method
investment 240000 240000
NCI 144000 (360000*40/100) 150000
fair value of net asset at acqn -360000 -360000
24000 30000

Illustration 2-- Two Subsidiaries

1 Cost of investment
Deffered consideration (24*1*0.75) 18
 Share exchange (24*2/3*2) 32
50

Journal entry
DR. Cost of investment A/C 50
CR. Non current liability 18
CR. Share capital 16
CR. Share premium 16

2 Unwinding the discount

initial liability (18*10/100) 1.8

Journal entry
DR. Finance cost 1.8
CR. Non current liability - deffered consideration 1.8

Test your understanding 3 Cost of investment

Workings
Consolidated statement of financial position as at 30 june 20x8 W1 Group structure
Non Current Asset P
Property, plant & equipment (15000+9500) 24500 acquired 60% on 1 july 20x7
Goodwill 3790 S
Current Asset 12500
40790 W2 Net Asset of S

Equity Particulars
Share capital (6000+1200) 7200 Share capital
share premium (4000+960) 4960 share premium
retained earnings 13239 Retained earnings
non controlling interest 6310
W3 Goodwill
Non current liability (1000+500+1680+101) 3281 Investments
Currest liability (4000+1800) 5800 NCI
40790 Share exchang e
(5000*60%*2/5*1.80)
W4 Non Controlling interest Deffered consideration
(2000*1/1.06^3)
Nci value at acqn 5750 Net Asset At Acqn
s share in post acqn (40%) 560
6310

W5 Group retained earnings

Deffered consideration (1680*6%) -101
p retained earning 12500
p share in post acqn (60%) 840
13239
Test your understanding 4
Workings
Consolidated Statement of financial position as at 31 december 20x4 W1 Group Structure
Non Current Asset
Property plant and equipment (5500+1500+200-80) 7120 Peppermint
brand name (250-50) 200 Acquired 80% two years ago
Goodwill 782 Spearmint

Current Assets W2 Net asset of spearmint

Inventory (550+100) 650
Receivables (400+200) 600 Particulars
Cash (200+50) 250 Share capital
9602 Retained earnings
Equity plant
Share capital (2000+200) 2200 Depreciation (200*2/5)
Retained earnings 1151 Brand (mintfresh)
Non controlling interest 337 Amortisation (250*2/10)
Share premium 160

Non current liability (3000+400) 3400 W3 Goodwill

Deffered consideration (375+79) 454
Current liability (1250+650) 1900 Investment
9602 Non controlling interest
Share exchange (200*1.80)
W5 Group retained earnings Deffered consideration (500*0.75)
Net asset acqn
Retained earnings of peppermint 1400 Impairment
peppermintt share in post acqn (45*80%) 36 Carrying goodwill
peppermint share in impairment of goodwill (258*80% -206
unwinding discount -79 Journal entry of deffered consderation &
1151
DR. Investment
CR. Share capital
CR. Share premium
W6 Unwinding discount
present value of deffered consideration at reporting 454 DR. Investment
present value of deffered consideration at acqn 375 CR. deffered consderation
79
DR. Retained earnings 79 W4 Non controlling interest
CR. Deffered consideration 79
non controlling interest on acqn
NCI share in post acqn (45*20%)
NCI share in goodwill impairment (258*
Non controlling interest on repoting
Illustration 5 -- inter-company current accounts

Consolidated statement of financial position as at 31 march 20x7 Workings

W1 Group structure
Non current assets
Property plant and equipment (100+140) 240 Plant
Goodwill 72 Acquired 80% in 20x1
Shrub
Current assets
Inventory 65 W2 Net asset of shrub
Trade receivables (20+10-2CIT-6interco) 22
Cash (10+5+2 cit) 17 Particulars
416 Share capital
Equity Share premium
Share capital 200 Retained earninngs
Share premium 10
Retained earnings 52 W3 Goodwill
Non controlling interest 30
investment
Non Current liabilities 65 Non controlling interest (135*20/100)
Current Liabilities (25+40-6inter co) 59 net asset at acqn
416

W5 Group Retained Earning W4 Non Controlling Interest

Ratained earning as in tb 40 NCI at acqn

plant share in post acqn 12 Shrub share in post acqn
52

Test your understanding 5

Consolidated statement of financial position as at 30 june 20x8 Workings
Non Currrent Assets W1 Group structure
Land (4500+2500+1250) 8250 P
Plant and equipment (2400+1750+500-300) 4350 Acquired 75% on 1 july 20x5
Goodwill 600 S
Investments (8000-3500-500*60%) 4200
Current Assets W2 Net Asset Of S
Inventory (3200+900) 4100
Receivables (1400+650-100CIT-400inter co ) 1550 Particulars
Bank (600+150+100cit) 850 Share capital
23900 retained earnings
Fair value : land
Equity Fair value : plant
Share capital 5000 Depriciation (500*3/5)
Retained earnings 9500
Non controlling interest 1500
 W3 Goodwill
Non Current liabilities (4000+500-(500*60/100) 4200
Current liabilities (2800+1300-400inter co ) 3700 Investment
23900 NCI value at acqn
W5 Group Retained Earnings (1000/0.50*25/100*2.20)
Net asset at acqn
Retained earning of p 8300 Impairment
p's share in post acqn (1700*75 1275 Goodwill
Share in impairment -75
9500 W4 Non Controlling Interest

NCI value at acqn

S share in post acqn
share in impairment

Test Your Understanding 6

Workings
Consolidated statement of financial position at 31 december 20x3 W1 Group Structure
Non Current Assets
Property plant and equipment (100+30) 130 Health
Goodwill 18 Acquired 90% 2years ago
Safety
Current Assets
Inventory (90+20-4) 106 W2 Net Asset Of Safety
Receivables (110+25-22) 113
Bank (10+5) 15 Particulars
382 Share capital
Retained earnings
Equity PUP
Share capital 15
Retained earnings 169.8 W3 Goodwill
Non Controlling Interest 5.2
Investment
Non Current Liability (120+28) 148 NCI
Current Liability (50+16-22) 44 impairment
382 net assets at acqn
W6 Group retained earning

Retained earnings as per tb 159 W4 PUP

Health share in post acqn 19.8
Health share in impairment -9 sales * markup fraction * remaining inve
169.8 18*50/150*2/3

W5 Non controlling interest

NCI at acqn
safety share in post acqn
 safety share in impairment
NCI at reporting

Test Your Understanding 7

Consolidated statement of financial position as at 30 November 20x7 Workings
Non Current Asset W1 Group Structure
Propert plant and equipment (138000+115000-4500) 248500
Goodwill 21250 Karl
Investment (98000-76000-20000) 2000 acquired 60 % on 1 may 20x7
Current Assets Susan
Inventory 15000+17000-1600) 30400
Receivables (19000+20000-2500CIT-1500 intra co) 35000 W2 PUP- inventory
Cash (2000+2500) 4500
341650 8000*25/125 = 1600

Equity W3 PUP- plant

Share capital 50000
Retained earnings 185890 Particulars
Non controlling interest 51260 Carrying amount
Depreciation
Non Current Liability 0 (*1/5*6/12)
Current Liability (33000+23000-1500intra co ) 54500
341650
W4 Net Asset Of Susan
W6 Non Controlling Interest
Particulars
Non controlling interest at acqn 50000 Share capital
NCI share in post acqn (4150*40%) 1660 Retained earning
NCI share in impairment (1000*40%) -400 PUP (W2)
Non Controlling Interest on post acqn 51260 PUP (W3)

W7 Group Retained Earnings

Retained earnings at reporting date
Retained earning 189000 Post acqn profit (9000*7/12)
PUP -5000 Retained earning at acqn
Impairment (1000*60/100) -600
Share in post acqn (4150*60/100) 2490 W5 Goodwill
185890
Investment
Non Controlling Interest
Fair value of net asset at acquisition
Impairment
Goodwill as per SFP
Group structure

acquired 100% on 31st december 20x4

Group structure

Acquired 80% 16000/20000

Net asset of jones

Particulars On acqn On reporting On post acqn
Share capital 20000 20000 0
retained earnings 20000 25000 5000
Share premium 10000 10000 0
50000 55000 5000

Investment 60000
Non controlling interest 12500
Fair value of net asset at acqn -50000
Goodwill at acqn 22500

Non Controlling Interest

NCI share in acqn 12500
NCI share in post acqn (5000*20%) 1000
13500
60% on 1 july 20x7

on acqn on reporting on post acqn

5000 5000 0
0 0 0
5800 7200 1400
10800 12200 1400

5000
5750
2160
%*2/5*1.80)
consideration 1680

-10800
3790
80% two years ago

of spearmint

on acqn on reporting on post acqn

500 500 0
125 300 175
200 200 0
tion (200*2/5) 0 -80 -80
250 250 0
tion (250*2/10) 0 -50 -50
1075 1120 45

1000
rolling interest 380
hange (200*1.80) 360
consideration (500*0.75) 375
-1075
-258
782

ntry of deffered consderation & share exchange

Investment 360
Share capital 200
Share premium 160

Investment 375
deffered consderation 375

rolling interest

olling interest on acqn 380

in post acqn (45*20%) 9
in goodwill impairment (258*20%) -52
rolling interest on repoting 337
80% in 20x1

on acqn on reporting on post acqn

100 100 0
30 30 0
5 20 15
135 150 15

180
rolling interest (135*20/100) 27
-135
72

rolling Interest

27
re in post acqn (15*20%) 3
30

75% on 1 july 20x5

on acqn on reporting on post acqn

1000 1000 0
1150 3150 2000
(3750-2500 1250 1250 0
500 500 0
on (500*3/5) 0 -300 -300
3900 5600 1700
 3500
1100
0*25/100*2.20)
-3900
-100
600

rolling Interest

1100
425
(100*25%) -25
1500

90% 2years ago

On acqn On reporting On post acqn

5 5 0
5 31 26
0 -4 -4
10 32 22

34
4
-10
-10
18

arkup fraction * remaining inventory

4

rolling interest

4
are in post acqn 2.2
are in impairment -1
5.2

60 % on 1 may 20x7

With transfer without transfer PUP

15000 10000 5000

-1500 -1000 -500

13500 9000 4500

On acqn On reporting On post acqn

40000 40000 0
63750 69000 5250
-1600 -1600
500 500
103750 107900 4150

earnings at reporting date 69000

profit (9000*7/12) -5250
earning at acqn 63750

76000
rolling Interest 50000
of net asset at acquisition -103750
-1000
21250