ER acquired 80 per cent of the 1 million $1 equity shares of MW on 1 January 20X2 when MW’s retained earnings were $1,050,000. The consideration for the acquisition consisted of $400,000 cash paid on the acquisition date and the transfer of 500,000 $1 equity shares in ER with a fair value of $4 each at the acquisition date. The non-controlling interest in MW was measured at its fair value of $560,000 at the date of acquisition. On 1 January 20X2, the carrying value of MW’s net assets was considered to be the same as their fair value with the following exceptions: 

• Leasehold property with a carrying value of $1,200,000 had a fair value of $1,320,000 and an estimated useful life of 5 years from the date of acquisition. ER depreciates property, plant and equipment on a straight line basis.

• A contingent liability, which had a fair value of $180,000 at the date of acquisition, had a fair value of $60,000 at 31 December 20X3. This contingent liability is not reflected in the individual financial statements of MW.

The retained earnings reported in the financial statements of ER and MW as at 31 December 20X3 were $7,900,000 and $1,400,000, respectively. An impairment of 10 per cent was recorded in ER’s group financial statements as at 31 December 20X2. An impairment review performed on 31 December 20X3 indicated that goodwill on the acquisition of MW had been further impaired by 20 per cent of its carrying value at that date. ER has no other subsidiaries.

Required:

Calculate the amounts that will be included in the consolidated statement of financial position of the ER group as at 31 December 20X3 for:

(a) Goodwill 

(b) Retained earnings 

(c) Non-controlling interest.