Flag question Information text CASE STUDY GROUP CONSOLIDATED STATEMENT OF FINANCIAL POSITION Akosua Ltd, a public limited liability company in Ghana, operates in the manufacturing sector. Akosua Ltd has investments in two other Ghanaian companies. The draft statement of financial position as at 31 March 2019 is as follows: Akosua Assets Nyarko GH'm GHe'm Appiah GH'm 650.00 720.00 550.00 Non-current assets Property plant and equipment Investments in subsidiaries Nyarko Limited Appiah Limited Financial assets 625.00 155.00 635.00 160.00 10.50 70.50 1,660.00 720.50 Current assets 447.50 1,195.50 340.50 1,536.0 sy 75.00 2,107.5 795.50 875.00 605.00 400.00 620.00 465.00 175.00 Total assets Equity and liabilities: Share capital Retained earnings Other components of equity Total equity Non-current liabilities Current liabilities Total liabilities Total equity and liabilities 62.50 40.00 47.50 1,557.50 622.50 492.50 1,110 382.50 43.50 75.00 57.50 98.00 550.00 426.00 173.00 2,107.50 1,536.00 795.50 Additional information: i) On 1 April 2017, Akosua Ltd acquired 14% of the equity interest of Appiah Ltd for a cash consideration of GH130 million and Nyarko Ltd acquired 70% of the equity interest of Appiah Appiah Ltd had a fair value of GH495 million, retained earnings were GH95 million and other Appiah Ltd had a fair value of GH575 million, retained earnings were GH120 million and other components of equity were GH35 million. The excess in fair value is due to non-depreciable land. The fair value of the 14% holding of Akosua Ltd in Appiah Ltd, which was classified as fair value through profit or loss, was GH 140 million at 31 March 2018 and GH155 million at 31 March 2019. However, the fair value of Nyarko Lid's interest in Appiah Ltd had not changed since acquisition ii) On 1 April 2018, Akosua Ltd acquired 60% of the equity interests of Nyarko Ltd, a public limited liability company in Ghana. The cost of investment comprised cash of GH625 million. On 1 April 2018, the fair value of the identifiable net assets acquired was GH975 million and retained earnings of Nyarko Ltd were GH325 million and other component of equity were GH27.5 million. The excess in fair value is due to non-depreciable land. It is the group's policy to measure the non-controlling interest at acquisition at its proportionate share of the fair value of the subsidiary's net assets. 11) Goodwill of Nyarko Ltd and Appiah Ltd were tested for impairment at 31 March 2019 and found that there was no impairment relating to Appiah Ltd. However, the goodwill of Nyarko Ltd was fully impaired by the reporting date. iv) On 1 April 2017, Akosua Ltd acquired office accommodation at a cost of GH45 million with a 30-year estimated useful life. During the year, the property market in the area slumped and the fair value of accommodation fell to GH37.5 million at 31 March 2018 and this was reflected in the financial statements. However, the market unexpectedly recovered quickly due to the announcement of major government investment in the area's transport infrastructure. On 31 March 2019, the valuer advised Akosua Ltd that the offices should now be valued at GH52.5 million. Akosua Ltd has charged depreciation for the year but has not taken account of the upward valuation of the offices. Akosua Ltd uses the revaluation model and records any valuation change when advised to do so. v) Akosua Ltd has announced two major restructuring plans during the year. The first plan is to reduce its capacity by the closure of some of its smaller factories, which have already been identified. This will lead to the redundancy of 500 employees, who have all individually been selected and communicated to. The costs of this plan are GH4.5 million in redundancy costs, GH2.5 million in retraining costs and GH2.5 million in lease termination costs. The second plan is to re-organize the finance and information technology department over a one-year period but it does not commence until two years' time. The plan will result in 20% of finance staff losing their jobs during the restructuring. The costs of this plan are GH5 million in redundancy