Earth bought 30 million shares in Island on 1 October 20X8, when Island had reserves of 45m. During the year to 30 September 20X9, Earth sold goods to Island at a gross profit on selling price of 30 per cent; 50m of these goods remained Island's stock on 30 September 20X9. Included in Island's 'creditors within one year' is an amount of 45m owed to Earth in respect of a loan made by Earth to Island. Island made a payment of 10m on 30 September 20X9 but this was not received by Earth until 4 October 20X9. On 1 October 20X8, Earth also bought a 30 per cent stake in River, when River had reserves of 30m. Earth has had involvement in day-to-day management policies since that date via a representative on River's board of directors. The respective balance sheets of the companies at 30 September 20X9 were as follows: Property, Plant& Equipment Investment in Island Investment in River Stock Debtors Loan to Island Bank Creditors within 1 year Creditors more than 1 year Share Capital (1) Share Premium Reserves (P&L) 90 35 55 10 190 50 Earth m 400 120 70 140 730 100 630 200 120 310 630 80 50 25 155 90 Island m 55 65 120 120 50 70 120 40 20 10 70 20 River m 100 50 150 150 80 70 150 Other information is provided as follows: At the date of both acquisitions, the fair value of assets in the acquired company was the same as their net book value. There have been no issues of shares by any of the three companies during the last three years. It is not considered necessary to make any impairment adjustment to goodwill. Answer ALL Questions: (a) (b) (c) Produce a consolidated balance sheet for Earth Group as at 30 September 20X9 consistent with international accounting standards. Explain how can a significant influence by an investor be evidenced under IAS 28, and justify your treatment of the investment in River in light of international GAAP. Explain the differences between a joint venture and join operation, and discuss critically the approach of international accounting standards to the accounting area of business combinations.