EXHIBIT 1.2

On 1 May 20X6, Ashanti Co acquired 70% of the equity interests of Bochem Co. The purchase consideration comprised cash of $140 million and Ashanti Co elected to measure the investment at cost in its separate financial statements. The fair value of the identifiable net assets of Bochem Co was $160 million at the acquisition date and the fair value of the non-controlling interest (NCI) in Bochem was $54 million. The share capital and retained earnings of Bochem Co were $55 million and $85 million respectively and other components of equity were $10 million at the date of acquisition. The excess of the fair value of the identifiable net assets at acquisition over carrying amount is due to plant, which is depreciated using the straight-line method and has a five-year remaining life at the date of acquisition. Depreciation, impairments and amortisation is recognised in operating costs.

Goodwill has been tested for impairment annually with no reduction in value at 30 April 20x7 and a 5% loss on its original value at 30 April 20x8. Ashanti Co disposed of a 10% equity interest to the NCI of Bochem Co on 30 April 20x8 for a cash consideration of $34 million. Non-controlling interest is measured at fair value.

EXHIBIT 1.3

The draft consolidated statement of profit or loss and other comprehensive income has been prepared by aggregating the income and expenses of Ashanti Co and its subsidiaries on a line-by line basis. Ashanti Cos gain on disposal of shares in Bochem Co has been included within other income in its draft consolidated statement of profit or loss and other comprehensive income.

The amount of profit and total comprehensive income due to the non-controlling interests has been calculated as 30% of the profit and total comprehensive income reported in Bochem Cos separate financial statements.

During the year ended 30 April 20x8 Bochem Co sold inventory to Ashanti Co for $12 million. At 30 April 20X8, $5 million of this inventory remained unsold. Bochem Co had made a profit of $1 million on these goods.

Refer to Exhibit 1.2 & 1.3

Question 1: Using a spreadsheet, adjust the draft consolidated statement of profit or loss and other comprehensive income for the year ended 30 April 20X8 in order to prepare a corrected statement. Ignore tax.