Based on the information provided in the case, prepare a detailed memo for the shareholders of TC Corporation. The following should be included in the comments:

$1.$ A detailed explanation of the important$/$significant financial accounting issues of TC$,$ Small Parts, Willow Design, and the nonstrategic investment in Zed. Provide a detailed explanation of the options$/$alternatives available for the reporting of the investments, your recommendations based on the information that is available to you and the necessary IFRS reporting requirements to support your decision or recommendation. In some cases, you will need to explain the available alternatives with a recommendation. The shareholders will need this detailed explanation to decide whether the recommendation you have made is acceptable. Note: The shareholders are also interested in increasing the return on asset ratio so this can affect your recommendations.

It is imperative that your memo for the shareholders contains sufficient detail so that they are able to understand why the preliminary $($i$.$e$.,$ draft$)$ consolidated financial statements are not currently IFRS compliant and an explanation of how to make them compliant.

For example, if you determine TC does not have significant influence over Willow Design, you must provide your reason$($s$)$ based on conditions that are used as possible indicators to establish the presence of significant influence $($e$.$g$.,$ see page $60$ in textbook$)$ and how they relate to the information provided in the assignment. Once you have made your fully supported determination, report on the available methods of reporting to account for TC$$s investment in Willow Design and your fully detailed recommendation. Your final recommendation will affect the recalculated account balances.

TC is planning to engage in foreign currency transactions in the coming year. What effect, if any, will these transactions have on TC$$s financial statements? $($Note: your explanation for this issue will be allocated bonus marks$).$

The following issues must be included $($but not limited to$)$ in your memo prepared for the shareholders as they relate to the facts in the case:

$$ The reason$($s$)$ why consolidated financial statements are required, in what circumstance they are required and an explanation$/$effect of the appropriate consolidation method.

$$ Use of the proportionate consolidation method.

$$ The valuation and accounting treatment of goodwill and$/$or negative goodwill.

$$ Valuation and calculation of the non$-$controlling interest.

$$ Calculation and explanation of the acquisition differential $($AD$).$

$$ Calculation and explanation of the changes to the AD$.$

$$ Accounting for intercompany transactions.

$$ Business combinations.

$$ Significant influence.

$$ Reporting of non$-$strategic investments

$$ Reporting of foreign currency transactions.

$2.$ Include the following recalculated account balances for the consolidated financial statements. The calculations are to be incorporated in the memo for the upcoming shareholders$$ meeting, therefore, you are to ensure your comments support your calculations. Do not just provide the calculations without integrating them into the memo with valid explanations to support the calculations. Note: the reference to the $$step$$ number is for your reference only and should not be used in the memo.

$$ The goodwill and NCI at acquisition date $($January $1,2024)($i$.$e$.,$ step $1).$

$$ The changes to AD$.($i$.$e$.,$ step $2).$

$$ The investment account balance for the investment in Willow Design as at December $31,2024.$

$$ The non$-$controlling interest for the consolidated balance sheet at December $31,2024($i$.$e$.,$ step $8).$

$$ The calculation of consolidated net income for $2024($i$.$e$.,$ step $6).$

$$ The calculation of consolidated net income attributable to NCI for $2024($i$.$e$.,$ step $6$A$).$

$$ The calculation of consolidated net income $$ ATP for $2024($i$.$e$.,$ step $6$B$).$

$$ Revised consolidated balance sheet amounts for inventory, land, plant and equipment, and goodwill at December $31,2024.$

Please note that the financial statements at December $31,2024$ are extracts. These are not complete financial statements so you will not be able to or are required to ensure that they balance. These statements provide insight into what reporting requirements have or have not been met and information for the recalculation of the balances noted above$\backslash$table$[[],[],[],[],[],[$Irforrastas fruen $x$