Q P $-$ A S R $-001|$ R e v $001$ E f f D a t e : $09-0$

$8-2023$

Page $3$ of $6$

Question Two $(35$ marks$)$

The following are the summarised statements of financial position of Tau, Sound and Roar as at $31$

December $2024.$

Tau Sound Roar

P$$ P$$ P$$

Non$-$current assets $280,000122,000340,000$

Investments $400,000130,000$

Current assets $60,00056,00030,000$

$$

$740,000308,000370,000$

$$

Equity shares of P$1$ each $400,000160,000200,000$

Retained earnings $300,000120,000160,000$

Other components of equity $20,00016,000$

Liabilities $20,00012,00010,000$

$$

$740,000308,000370,000$

$$

Additional Information:

i$)$ On $1$ January $2023$ Sound acquired $70,000$ ordinary shares in Roar at a cost of P$130,000$ when the

retained earnings of Roar amounted to P$80,000.$

ii$)$ On $1$ January $2024$ Tau acquired $128,000$ shares in Sound at a cost of P$240,000$ and $80,000$ shares in

Roar at a cost of P$160,000.$ On this date, the retained earnings of Sound and Roar amounted to

P$100,000$ and P$120,000$ respectively. Sound also had other components of equity of P$6,000.$ The fair

value of the NCI in Sound on $1$ January $2024$ was P$54,000.$ The fair value of the NCI $($direct and

indirect$)$ in Roar was P$112,000.$ The non$-$controlling interest is measured using the full goodwill

method. At the reporting date, goodwill has not been impaired.

iii$)$ On $1$ January $2024,$ Tau entered into a lease agreement. Tau is the lessor and is leasing a machine to

a third party for two years. The machine has a useful economic life of ten $(10)$ years. No receipt was

due during $2024$ so no accounting entries have been posted. Tau is due a receipt of P$100,000$ on $31$

December $2025.$

iv$)$ On $1$ January $2024,$ Tau granted $200$ share appreciation rights $($SARs$)$ to $120$ managers. These entitle

the holders to a cash bonus based on the share price of Tau. The SARs vest if the managers are still

employed by Tau at $31$ December $2027.$ Ten managers left during $2024$ and it is expected that

another $30$ will leave prior to $31$ December $2027.$ The fair value of each SAR was P$20$ on $1$ January

$2024$ and P$28$ on $31$ December $2024.$

Required:

Prepare the consolidated statement of financial position of the Tau group as at $31$ December $2024.$