On 1 January 2020, Ford plc acquired the following investments:

80% of the ordinary share capital of Mazda Plc at a cost of 27.2 million

1.6 million ordinary shares in Opel Plc at a cost of 12.5 each

Draft statements for these three companies at 31 December 2020 are summarised below:

Ford Mazda Opel

000 000 000

Assets

Non-current assets

Property, plant and equipment 40,000 17,000 33,000

Investments 52,000 3,000

92,000 17,000 36,000

Current assets 30,000 16,000 22,000

Total assets 122,000 33,000 58,000

Equity

Ordinary Shares (1 each) 20,000 6,000 8,000

Retained earnings 74,000 16,000 40,000

94,000 22,000 48,000

Liabilities

Non-current liabilities

Loan 8,000 4,000

Current liabilities 20,000 7,000 10,000

Total equity and liabilities 122,000 33,000 5 8,000

The following additional information is given:

On 1 January 2020, the fair value of Mazda's assets were equal to their carrying value other than land and the value of its brand name. The fair value of the land was

800,000 in excess of its carrying value and the brand name fair value was 3,200,000. The brand name was considered to have an indefinite useful life. Neither have been reflected in the above statements.

An impairment test on 31 December 2020 concluded that the consolidated goodwill was impaired by 800,000.

The net profit after tax for the year ended 31 December 2020 was 4 million for Mazda and 16 million for Opel.

No dividends were paid during the year by any of the companies and their share capital is unchanged since 1 January 2020.

Non-controlling interests in any subsidiaries are to be measured at the appropriate proportion of the subsidiaries identifiable net assets

Ford's own financial statements reflect investments at cost and the fair value of its investments other than Mazda and Opel have not changed.

Required:

1. Explain how the investments in Mazda and Opel should be treated in the consolidated financial statements.

2. Prepare the consolidated statements of financial position for the Ford Group as at 31 December 2020, showing your workings.

3. Explain why it is appropriate to recognise the Mazda brand name in the consolidated accounts when it has not been recognised in the Mazda statement of financial position.

4. Ford has identified that one of its assets may be subject to an impairment which has not yet been reflected in its own draft financial statements. The company has collected the following information about this asset:

Carrying value 150,000

Undiscounted expected future cashflow 146,000

Present value of future cash flows 126,000

Fair value of asset 128,000

Costs to sell 12,000

Calculate what Ford must report under IFRS and how this would differ under US GAAP (explain your workings).