Lanark plc $($Lanark$),$ a public limited company, operates in the manufacturing sector. Lanark has

investments in two other companies. The draft statements of financial position as at $31$ December $2023$

are as follows:

Lanark Strath Clyde

$$m $$m $$m

Non$-$current assets

Property, plant and equipment $3,8001,3001,100$

Investments in subsidiaries

Strath $1,510$

Clyde $3301,320------$

$5,6402,6201,100$

Current assets $1,450840310$

Total assets $7,0903,4601,410$

Equity and liabilities:

Share capital $3,9901,2001,000$

Retained earnings $1,5201,010366$

Revaluation reserve $($see note vi$)20--$

Total equity $5,5302,2101,366$

Non$-$current liabilities $1,10082026$

Current liabilities $46043018$

Total liabilities $1,5601,25044$

Total equity and liabilities $7,0903,4601,410$

The following information is relevant to the preparation of the group financial statements:

$($i$)$ On $1$ January $2022,$ Lanark acquired $70\%$ of the equity interests of Strath Ltd$.$ The purchase

consideration comprised cash of $1,510$ million. On $1$ January $2022,$ the fair value of the

identifiable net assets acquired was $1,820$ million and retained earnings of Strath were $590$

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.

$($ii$)$ On $1$ January $2021,$ Lanark acquired $16\%$ of the equity interests of Clyde Ltd for a cash

consideration of $260$ million and Strath acquired $80\%$ of the equity interests of Clyde for a cash

consideration of $1,320$ million. At $1$ January $2021,$ the identifiable net assets of Clyde had a fair

value of $1,050$ million and retained earnings were $276$ million. The excess in fair value is due

to non$-$depreciable land.

At $1$ January $2022,$ the identifiable net assets of Clyde had a fair value of $1,400$ million, retained

earnings were $340$ million. The excess in fair value is due to non$-$depreciable land.

Page $6$ of $9$ ACCT$3091-$WE$01$

continued

The fair value of the $16\%$ holding of Lanark in Clyde was $290$ million on $1$ January $2022$ and

$330$ million at $31$ December $2023.$ The fair value of Strath$$s interest in Clyde had not changed

since acquisition.

$($iii$)$ On $1$ July $2023$ Lanark sold some property to Strath Ltd for $140$ million. The property had a

carrying amount in Lanark$$s books of $110$ million at the date of sale. The estimated remaining

useful life of the property was reassessed at the date of sale as twenty years.

$($iv$)$ During $2023$ Strath Ltd has invoiced $90$ million of sales to Lanark all at a mark$-$up of $25\%.$ One

quarter of these goods were still in Lanark$$s inventories at the year end.

$($v$)$ On $1$ January $2023,$ Lanark issued $5,0001$ share options to each of its $1,000$ staff. The share

options are conditional on staff being employed by Lanark on $31$ December $2025$ and the share

options cannot be exercised unless Lanark$$s share price reaches $25$ on $31$ December $2025.$

Provided the share price target is met, the share options can be exercised at any time during the

following two years i$.$e$.,$ from $1$ January $2026$ to $31$ December $2027.$

The unadjusted fair value of the options on $1$ January $2023$ was $11\mathrm{.}20$: the adjusted fair value

considering the share price target was $10$ per share.

On $1$ January $2023,$ the directors estimated that $20\%$ of the staff would leave and forfeit their rights to

the shares. This estimate was subsequently revised down to $15\%$ on $31$ December $2023.$

Lanark$$s $1$ equity shares were quoted at $20$ per share on $1$ January $2023$ and at $22$ on $31$ December

$2023.$ The directors consider there is an $80\%$ probability that the share price target will be met on $31$

December $2025.$ The directors wish to account for the share$-$based payments in a separate equity

reserve.

$($vi$)$ Lanark acquired a piece of land used for storage purposes in $2010.$ The land was owneroccupied and correctly accounted for as PPE $($no depreciation$).$ The land was revalued in $2019.$ The

fair value as at $31$ December $2023$ has not yet been reflected in the financial statements.

Details of the land values are as follows:

Cost $1$ January $201010$ million

Fair Value $1$ January $201930$ million

Fair Value $31$ December $20238$ million

Required

Prepare the group consolidated statement of financial position of Lanark in a form suitable for

publication as at $31$ December $2023.$

Prepare your statement in $$ millions to $2$ decimal places.