further increase of R600 000 in the value of Gold Ltd's property since its value at acquisition and 30 September 2014 has not been recorded. (ii) On 30 September 2014, Diamond Itd accepted a R1 million 10% loan note from Gold Itd. Sales from Diamond Itd to Gold Itd throughout the year ended 30 September 2014 had consistently been R300 000 per month. Diamond Itd made a mark-up on cost of 25% on all these sales. R600 000 (at cost to Gold Itd) of Gold Ltd.'s inventory at 30 September 2014 had been supplied by Diamond Itd in the post-acquisition period. (iii) Diamond Itd had a trade receivable balance owing from Gold Itd of R1.2 million as at 30 September 2014. This differed to the equivalent trade payable of Gold Itd due to a payment by Gold Itd of R400 000 made in September 2014 which did not clear Diamond Ltd.'s bank account until 4 October 2014. Diamond Ltd.'s policy for cash timing differences is to adjust the parent's financial statements. (iv) Diamond Ltd.'s policy is to value the non-controlling interest at fair value at the date of acquisition. For this purpose Gold Ltd.'s share price at that date can be deemed to be representative of the fair value of the shares held by the non-controlling interest. (v) Due to recent adverse publicity concerning one of Gold Ltd.'s major product lines, the goodwill which arose on the acquisition of Gold Itd has been impaired by R500 000 as at 30 September 2014. Goodwill impairment should be treated as an

administrative expense. (vi) Assume, except where indicated otherwise, that all items of income and expenditure accrue evenly throughout the year. REQUIRED: b) a) Prepare the consolidated statement of profit or loss and other comprehensive income for Diamond Itd for the year ended 30 September 2014. (20) Prepare the consolidated statement of financial position for Diamond Itd as at 30 September 2014. (24) Diamond Itd is in the process of recording the acquisition of another subsidiary, Dilemma, and has identified two items when reviewing the fair values of Dilemma's assets. The first item relates to R1 million spent on a new research project. This amount has been correctly charged to profit or loss by Dilemma, but the directors of Diamond Itd have reliably assessed the fair value of this research to be R1.2 million. The second item relates to the customers of Dilemma. The directors of Diamond Itd believe Dilemma has a particularly strong list of reputable customers which could be 'sold' to other companies and have assessed the fair value of the customer list at R3 million. REQUIRED: State whether (and if so, at what value) the two items should be recognised in the consolidated. Statement of financial position of Diamond Itd on the acquisition of Dilemma. (6)

further increase of R600 000 in the value of Gold Ltd's property since its value at acquisition and 30 September 2014 has not been recorded. (ii) On 30 September 2014, Diamond Itd accepted a R1 million 10% loan note from Gold Itd. Sales from Diamond Itd to Gold Itd throughout the year ended 30 September 2014 had consistently been R300 000 per month. Diamond Itd made a mark-up on cost of 25% on all these sales. R600 000 (at cost to Gold Itd) of Gold Ltd.'s inventory at 30 September 2014 had been supplied by Diamond Itd in the post-acquisition period. (iii) Diamond Itd had a trade receivable balance owing from Gold Itd of R1.2 million as at 30 September 2014. This differed to the equivalent trade payable of Gold Itd due to a payment by Gold Itd of R400 000 made in September 2014 which did not clear Diamond Ltd.'s bank account until 4 October 2014. Diamond Ltd.'s policy for cash timing differences is to adjust the parent's financial statements. (iv) Diamond Ltd.'s policy is to value the non-controlling interest at fair value at the date of acquisition. For this purpose Gold Ltd.'s share price at that date can be deemed to be representative of the fair value of the shares held by the non-controlling interest. (v) Due to recent adverse publicity concerning one of Gold Ltd.'s major product lines, the goodwill which arose on the acquisition of Gold Itd has been impaired by R500 000 as at 30 September 2014. Goodwill impairment should be treated as an administrative expense. (vi) Assume, except where indicated otherwise, that all items of income and expenditure accrue evenly throughout the year. REQUIRED: a) Prepare the consolidated statement of profit or loss and other comprehensive income for Diamond Itd for the year ended 30 September 2014. (20) b) Prepare the consolidated statement of financial position for Diamond Itd as at 30 September 2014. (24) Diamond Itd is in the process of recording the acquisition of another subsidiary, Dilemma, and has identified two items when reviewing the fair values of Dilemma's assets. The first item relates to R1 million spent on a new research project. This amount has been correctly charged to profit or loss by Dilemma, but the directors of Diamond Itd have reliably assessed the fair value of this research to be R1.2 million. The second item relates to the customers of Dilemma. The directors of Diamond Itd believe Dilemma has a particularly strong list of reputable customers which could be 'sold' to other companies and have assessed the fair value of the customer list at R3 million. REQUIRED: State whether (and if so, at what value) the two items should be recognised in the consolidated Statement of financial position of Diamond Itd on the acquisition of Dilemma. (6) further increase of R600 000 in the value of Gold Ltd's property since its value at acquisition and 30 September 2014 has not been recorded. (ii) On 30 September 2014, Diamond Itd accepted a R1 million 10% loan note from Gold Itd. Sales from Diamond Itd to Gold Itd throughout the year ended 30 September 2014 had consistently been R300 000 per month. Diamond Itd made a mark-up on cost of 25% on all these sales. R600 000 (at cost to Gold Itd) of Gold Ltd.'s inventory at 30 September 2014 had been supplied by Diamond Itd in the post-acquisition period. (iii) Diamond Itd had a trade receivable balance owing from Gold Itd of R1.2 million as at 30 September 2014. This differed to the equivalent trade payable of Gold Itd due to a payment by Gold Itd of R400 000 made in September 2014 which did not clear Diamond Ltd.'s bank account until 4 October 2014. Diamond Ltd.'s policy for cash timing differences is to adjust the parent's financial statements. (iv) Diamond Ltd.'s policy is to value the non-controlling interest at fair value at the date of acquisition. For this purpose Gold Ltd.'s share price at that date can be deemed to be representative of the fair value of the shares held by the non-controlling interest. (v) Due to recent adverse publicity concerning one of Gold Ltd.'s major product lines, the goodwill which arose on the acquisition of Gold Itd has been impaired by R500 000 as at 30 September 2014. Goodwill impairment should be treated as an administrative expense. (vi) Assume, except where indicated otherwise, that all items of income and expenditure accrue evenly throughout the year. REQUIRED: a) Prepare the consolidated statement of profit or loss and other comprehensive income for Diamond Itd for the year ended 30 September 2014. (20) b) Prepare the consolidated statement of financial position for Diamond Itd as at 30 September 2014. (24) Diamond Itd is in the process of recording the acquisition of another subsidiary, Dilemma, and has identified two items when reviewing the fair values of Dilemma's assets. The first item relates to R1 million spent on a new research project. This amount has been correctly charged to profit or loss by Dilemma, but the directors of Diamond Itd have reliably assessed the fair value of this research to be R1.2 million. The second item relates to the customers of Dilemma. The directors of Diamond Itd believe Dilemma has a particularly strong list of reputable customers which could be 'sold' to other companies and have assessed the fair value of the customer list at R3 million. REQUIRED: State whether (and if so, at what value) the two items should be recognised in the consolidated Statement of financial position of Diamond Itd on the acquisition of Dilemma. (6)