In January 2015, Pol acquired 75% of Sol's equity shares by means of an immediate share exchange of 2 shares in Pol for five shares in Sol. The share value of Pol and Sol's shares at 1 January 2015 were $4.00 and $3.00 respectively. In addition to the share exchange Pol will make a cash payment of $1.32 per acquired share, deferred until 1 January 2016. Pol has not recorded any of the consideration for Sol in its financial statements. Pol's cost of capital is 10% per annum.

The summarized statement of financial position for the two companies at 30 June 2015 are:

POL

SOL

Assets

$'000

$'000

Non-current assets (note (ii))

Property plant and Equipment

55,000

28,600

Financial Asset Equity Investment (note (v))

11,500

6.000

66,500

34,600

Current assets

Inventory (note (iv))

17,000

15,400

Trade Receivables (note (iv))

14,300

10,500

Bank

2,200

1,600

33,500

27,500

Total assets

100,000

62,100

Equity and Liabilities

Equity

Equity shares of $1 each

20,000

20,000

Other components of Equity

4,000

0

Retained earnings at 1 July 2014

26200

14,000

For the year ended 30 June 2015

24,000

10,000

74,200

44,000

Liabilities

Current liabilities (note i(v))

25,800

18,100

Total equity and liabilities

!00,000

62,100

The following Information is relevant:

(i) Sol's business is seasonal and 60% of its annual profits is made between 1 January and 30 June each year.

(ii) At the date of acquisition, the fair value of Sol's net assets was equal to their carrying amount with the following exceptions:

An item of plant had a fair value of $2 million below its carrying value at the date of Sol's acquisition it had a remaining life of 2 years

The fair value of Sol's investment was $7 million (see note(v))

Sol owned the right to a popular mobile (cellular) phone game. At the date of acquisition, a

specialist valuer estimated that the rights worth $12 million and had an estimated remaining

life of 5 years.

(iii) Following an impairment review, consolidated goodwill is to be written down by $3 million

as at 30 June 2015.

(iv) Pol sells goods to Sol at a cost plus 30%. Sol had $1.8 million of goods in its inventory at 30

June 2015 which had been supplied by Pol. In addition, on 28 June 2015 Pol processed the

sale of $800,000 of goods to Sol which Sol dis not account for until their receipt on 2 July

2015. The in-transit reconciliation should be achieved by assuming the transaction had been

recorded in the books of sol before the year end at 30 June 2015. Pol had a trade receivable

balance of $2.4 million from Sol which differed to the equivalent balance in Sol's Books due

to the sale made on 28 June 2015.

(v) At 30 June 2015, the fair values of the financial asset equity of Pol and Sol were $13.2 and

$7.9 million respectively.

(vi) Pol's policy is to value the non-controlling interest at a fair value at the date of acquisition.

For this purpose, Sol's share price at that date is representative of the fair value of the

shares held by the non-controlling interest.

Required

How to Prepare the consolidated Statement of financial position as at 30 June 2015.?