CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

.Additional information

1. HM acquired 80% of the ordinary share capital of a foreign entity, OS, on 1 January

2011 for Crowns 13,984,000. At the date of acquisition the net assets of OS had a

fair value of Crowns 15,800,000. The group policy is to value non-controlling interest

at fair value at the date of acquisition. The fair value of the non-controlling interest at

the date of acquisition was Crowns 3,496,000. The fair value adjustments related to

non-depreciable land. At 31 December 2011 the goodwill that arose on the

acquisition of OS was impaired by 20%. Impairment is translated at the average rate

and is charged to group administrative expenses.

2. The relevant exchange rates were as follows:

1 January 2011 AR/Crowns 1.61 (AR1 = Crowns 1.61)

31 December 2011 AR/Crowns 1.52 (AR1 = Crowns 1.52)

Average rate for 2011 AR/Crowns 1.58 (AR1 = Crowns 1.58)

Required:

(a) Calculate the translation gain or loss for the HM Group for the year ended 31

December 2011.

(b) Prepare the consolidated statement of comprehensive income for the HM Group for

the year ended 31 December 2011.

The income statements for HM and OS for the year ended 31 December 2011 are shown below