Putri Bhd is a public listed company based in Kluang with shareholdings in two other companies, Sofia Bhd and Farah Bhd. The statement of financial position for all three companies as at 31 July 2021 are shown below:

Statement of Financial Position as at 31 July 2021

Non-current assets Property, plant & equipment Investment Current assets Inventories Trade receivable Cash & bank Total assets Equity Equity share capital Other equity reserves Retained earnings Current liabilities Contingent consideration Trade payables Taxation Dividend proposed Total equity and liabilities

Putri Bhd RMMillion 758 1,200 ---------- 1,958 ---------- 235 188 100 ----------- 523 ----------- 2,481 ======= 1,000 200 977 ----------- 2,177 ----------- 38 161 25 80 ----------- 304 ----------- 2,481 =======

Sofia Bhd RMMillion 326 40 ---------- 366 ---------- 153 134 36 ----------- 323 ----------- 689 ======= 400 30 112 ----------- 542 ----------- - 127 20 - ----------- 147 ----------- 689 =======

Farah Bhd RMMillion 159 25 ---------- 184 ---------- 65 42 20 ----------- 127 ----------- 311 ======= 100 80 70 ----------- 250 ----------- - 46 15 - ----------- 61 ----------- 311 ======

The following information should be taken into consideration:

1. The number of shares issued and fully paid as at 31^st July 2021 by entities:

Putri Bhd - 1,000,000,000 shares

Sofia Bhd - 400,000,000 shares

Farah Bhd - 100,000,000 shares

2. Putri bought 320 million ordinary shares in Sofia on 1 August 2020, when the other equity reserves of Sofia were RM20 million and the retained earnings of Sofia were RM132 million. The consideration was agreed at RM800 million. This was satisfied by the issue of 200 million equity shares by Putri at an agreed fair valuation of RM750 million, plus RM50 million to be paid by Putri on 31 July 2021 if the profit target for the year (RM15 million) was met by Sofia. The contingent element of the consideration was recorded at its fair value of RM38 million at 1 August 2020. As it turned out, significant losses were incurred by Sofia in the year to 31 July 2021. Consequently, nothing is payable by Putri on 31 July 2021 under this part of the deal. No entry has been made by Putri to reflect this change in expectation.

3. The group accounting policy is to value any non-controlling interest (NCI) at their fair value at the acquisition date. On the date, Putri acquired its interest in Sofia, the fair value of the NCI in Sofia was RM130 million.

4. At 1 August 2020, some equipment held by Sofia has a fair value RM25 million in excess of its carrying value. This equipment had a remaining useful life of 5 years at that date.

5. Putri bought a 30% holding in the ordinary shares of Farah on 1 August 2020 when the other equity reserves of Farah were RM75 million and the retained earnings balance in Farahs books stood at RM60 million. The consideration consisted of an immediate cash payment of RM112 million. Putri exerts significant influence over Farah as a result of this shareholding. Other investments are held by all three companies. These are equity investments and not more than 5% of the issued share capital is held in any of these individual entities.

6. During the financial year 31 July 2021, Sofia sold good to Putri for RM30 million. These goods were sold at a mark-up on cost of 100%. Of these goods, 40% of these goods remained in the inventory of Putri at 31 July 2021 and RM2.5 million of the cost of these goods remained unpaid by Putri at 31 July 2021.

7. No dividends were paid or proposed in the year by any of the companies.

8. Due to the unexpected losses incurred by Sofia during the year, an impairment review was undertaken on 31 July 2021 and goodwill was found to be impaired by 60% of its acquisition value. There was no impairment necessary in respect of the investment in Farah.

Note: All workings should be rounded to the nearest RM 0.1 million

Required:

1. Computation of the goodwill value that arises from the acquisition of Sofia Bhds business by Putri Bhd (

(b) Prepare the Consolidated Statement of Financial Position for the Putri Group as at 31 July 2021 in accordance to MFRS 3: Business Combination. (You are required to work out all supporting calculations)