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3-1 HH has held shares in two companies, SS and AA, for a number of years. As at 31 December 2012, they have the following

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3-1 HH has held shares in two companies, SS and AA, for a number of years. As at 31 December 2012, they have the following statements of financial position HH SS AA C'OOQEOOVE '000 Non-Current assets Property, plant & equipmelo 190 260 Investments 218 - 588 190 260 Current assets: Inventories 160 100 180 Trade receivables 170 90 100 Cash 50 40 10 380 230 290 968 420 550 Equity Share capital (el ordinary res30 50 Share deals account 100 80 30 Retained earnings 568 200 400 868 360 480 Current liabilities Trade payables 100 60 70 968 420 550 You ascertain the following additional information: a) The investments' in the statement of financial position comprise solely HH's investment in SS (128,000) and in AA (90,000). b) The 48,000 shares in SS were acquired when SS's retained earnings balance stood at 20,000. The 15,000 shares in AA were acquired when that company had a retained earnings balance of 150,000. c) When HH acquired its shares in SS the fair value of SS's net assets equaled their book values with the following exceptions: C'000 Property, plant and equipment 50 higher Inventories 20 lower (sold during 2012) Depreciation arising on the fair value adjustment to non-current asses since this date is 5,000. d) During the year, HH sold inventories to SS for 16,000, which originally cost HH 10,000. Three-quarters of these inventories have subsequently been sold by SS. e) No impairment losses on goodwill had been necessary by 31 December 2012. Required Produce the consolidated statement of financial position for the HH group (incorporating the associate). It is the group policy to value the non-controlling interest at full (or fair) value. The fair value of the non-controlling interest at acquisition was 90,000

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