Exercise 2 (20 Points) The statements of financial position of P AG and S AG as at 31.12.2020 are as follows: Non-current assets Property, plant and equipment Investment in S AG Current assets PAG SAG 6,910 1,640 1,400 8,310 3,110 1,120 11,420 2,760 Equity Ordinary share capital 4,000 500 Retained earnings 5.380 1.550 9,380 2,050 Liabilities Current liabilities 2,040 710 11,420 2,760 The following information is available: P AG acquired 70% of the share capital of S AG on 31 May 2012. There have been no changes in the share capital of S AG since that date. On 31 May 2012, the fair value of the non-current assets of S AG was 150,000 higher than their book value on that date. This valuation has not been reflected in the books of SAG. On 31 May 2012, the retained earnings of S AG were 850,000. Goodwill has suffered no impairment since 31 May 2012. Any depreciation consequences of the fair value adjustments may be ignored. a) Prepare a consolidated statement of financial position as at 31.12.2020, assuming the non- controlling interest in S AG is to be measured at the appropriate proportion of that company's identifiable net assets. b) Explain how this consolidation statement would be modified if the non-controlling interest in SAG on acquisition was measured at fair value and this fair value was determined by P AG to be 530,000 .