53)

Laurel acquired 80% of the ordinary share capital of Hardy for $160m and 40% of the ordinary share

capital of

Comic for $70m on 1 January 20X7 when the retained earnings b

alances were $64m in Hardy

and

$24m in Comic.

Laurel, Comic and Hardy are public lim

ited companies.

The statements of financial position

of the three companies at 31 December 20X9 are set out below:

C

ompiled

by Dakito Alemu (Ph.D)

Laurel

Hardy

Comic

$m

$m

$m

Non

-

current assets

Property, plant and equipment

220

160

78

Investments

230

-

-

450

160

78

Current assets

Invento

ries

384

234

122

Trade receivables

275

166

67

Cash at bank

42

10

34

701

410

223

1,151

570

301

Equity

Share capital

-

$1 ordinary shares

400

96

80

Share premium

16

3

-

Retained earnings

278

128

97

694

227

177

Current liabilities

Trade payables

457

343

124

1

,151

570

301

You are also given the following information:

1

On 30 November 20X9 Laurel sold some goods to Hardy for cash for $32m. These goods had originally cost

$22m and none had been sold by the year end. On the same date Laurel also sold goods to Com

ic for cash for

$22m. These goods originally cost $10m and Comic had sold half by the year end.

2

On 1 January 20X7 Hardy owned some items of equipment with a book value o

f $45m that had a fair

value of

$57m. These assets were originally purchased by Hard

y on 1 January 20X5 and are being depreciated over

years.

3

Group policy is to measure non

-

controlling interests at acquisition at fair value. The fair value of the non

-

controlling interests in Hardy on 1 January 20X7 was calculated as $39m.

4

Cumulativ

e impairment losses on recognised goodwill amounted to $15m at 31 December 20X9. No

impairment losses have been necessary to date relating to the investment in the associate.

C

Required

Prepare a consolidated statement of financial position for Laurel and i

ts subsidiary as at

31 December 20X9,

incorporating its associate in accordance with IAS28.