1) Prepare the consolidated statement of financial position of Aubin Plc as at 30 September 2015.

2) Intercompany transactions, receivables, liabilities and unrealised profits are eliminated on consolidation.

a. Discuss 3 examples of intercompany transactions.

b. What is meant by ‘are eliminated’?

c. Explain what effect there could be on the consolidated financial statements if they were not eliminated.

Aubin Plc prepares its consolidated financial statements in accordance with IFRS and has investments in two companies, Bobin Ltd and Cabin Ltd. The draft, summarised of financial position of the three companies at 30 September 2015 is as shown below: Cabin 000 Aubin Bobin 000 000 Assets Non-current assets Property, Plant and Equipment Investments 7,080 6,000 13,080 2,800 3,600 2,800 3,600 Current assets 1,560 740 37.6 2,337.6 15,417.6 4,395.5 Inventories 1,350 890 Trade and other receivables 240 5.5 196 Cash and cash equivalents 0.5 1,595.5 1,086.5 4,686.5 Total assets Equity and Liabilities Equity Ordinary share capital (1 share) Share premium account Retained earnings Total equity Non-current liabilities Borrowings 7,000 2,000 4,000 2,000 5,054.6 14,054.6 100 (111.5) 4,043.9 3,988.5 500 1,543.9 300 50 287 Current liabilities 678 Trade and other payables Bank overdraft 156.6 145.5 41.5 Taxation 385 145 301.6 224 1063 411 Total equity and liabilities 15,417.6 4,395.5 4,686.5