Q1.

Sincere Request not to copy from other answers. This is a different question. If seen copying, will report your account and downvote the answer.

Q2.

Q1 Alpha, a parent with one subsidiary, Beta, is preparing the consolidated statement of financial position as at 30 September 20X5. The following exhibits, available on the left-hand side of the screen, provide information relevant to the question: 1. Financial statement extracts - statements of financial position (SOFP) of Alpha and Beta at 30 September 20X5. 2. Alpha's investment in Beta - details of Alpha's investment in Beta which are relevant to the question. 3. Intra-group trading - details of intra-group trading. 4. Impairment review - details of Alpha's impairment review of the investment in Beta including goodwill. 5. Retirement plan - details of Alpha's defined benefit retirement plan. This information should be used to answer the question requirement within the response option provided. Alnha 50001 Beta $'000 Assets Non-current assets Property and Investments in ouit in Ets 2 and 30.000 RA 310000 Current assets Inventores Taivas Cash and cash coulents 36.000 99.000 2016 2009 95.000 23.00 12. Total assets to.com Equity and liabilities Share catal51 shares Peta ned eamines Other components of Total quity 180.000 150.000 ALBA 65.000 20000 Non-current liabilities Longborrowings 'Deferred Pension Total non-current liabilities 15.000 20.000 30.000 annon A 2016 Current liabilities Trade and enero Guments Total current abilities 70.0001 201609 ona Total liabilities 2. TOLDI CUITETI Tdomes CALL 100.000 Total liabilities Total equity and liabilities 260.000 420.000 2210 On 1 October 20X4, Alpha acquired 60 million shares in Beta and gained control of Beta. Alpha made a cash payment of $175 million to the former shareholders of Beta on 1 October 20X4. Alpha incurred acquisition costs of $5 million and has presented the total costs of $180 million as investments in equity instruments. A condition of the purchase agreement was that Alpha would make a further cash payment to the former shareholders of Beta on 30 September 20X7. The amount of this further cash payment depends on the performance of Beta in the three-year period from 1 October 20X4 to 30 September 2007. On 1 October 20X4, the fair value of this conditional payment was $60 million. Because the performance of Beta in the year ended 30 September 20X5 was below expectations, the fair value of the conditional payment had reduced to $50 million by 30 September 20X5. Alpha has not made any entries in its own financial statements in respect of this conditional payment. On 1 October 20X4, Beta had retained earnings of $80 million and other components of equity of $45 million. On 1 October 20X4, the fair values of Beta's identifiable assets and liabilities were the same as their carrying amounts in the individual financial statements of Beta with the exception of property, plant and equipment which had a carrying amount of $150 million and a fair value of $205 million. On 1 October 20X4, the useful life of this property, plant and equipment was five years. The fair value adjustments should be regarded as temporary differences for the purposes of computing deferred tax. The relevant rate of income tax to use for this purpose is 20%. The directors of Alpha measured the non-controlling interest in Beta at its fair value at the date of acquisition. On 1 October 20X4, the fair value of the non-controlling interest was $65 million. Since 1 October 20X4, Beta has been supplying Alpha with a product. Beta earns a margin of 25% on this product. On 30 September 20X5, the inventories of Alpha included $20 million in respect of the product. There were no outstanding intra-group balances at 30 September 2005. Alpha undertook an impairment review of its investment in Beta at 30 September 2005. Beta comprises three cash generating units for impairment review purposes. Relevant details are as follows: Cash generating Percentage of net Recoverable amount of CGU unit (CGU) assets and goodwill at 30 September 20X5 % $'000 40 100,000 B 35 110,000 C 25 80,000 Alnha has established a defined benefit retirement plan for its current and former employees Alpha has established a defined benefit retirement plan for its current and former employees. Beta has not established such a plan. The statement of financial position of Alpha in Exhibit 1 shows the net defined benefit pension liability at 30 September 20X4. During the year ended 30 September 20X5, Alpha made a payment of $30 million to the plan. When making this payment, Alpha debited retained earnings and credited cash. This is the only accounting entry which has been made in relation to the plan for the year to 30 September 20X5. The current service cost for the year ended 30 September 20X5 was $25 million. The net interest cost on the pension liability for the vear ended 30 September 2005 was $2.5 million Using the information in Exhibits 1 - 5, prepare the consolidated statement of financial position of Alpha at 30 September 20X5. Note: Unless specifically referred to in the exhibits you should ignore deferred tax. You will know that during the year we made a strategic long-term Investment in Sandy, an entity which is a vital part of our supply chain. I believe we purchased 40% of the shares, which carry one vote cach, and that this gave us the right to appoint four of the ten directors. The other six directors are independent of each other, they don't always agree when voting. I was expecting to see Sandy Included as a subsidiary in our consolidated financial statements but instead the Investment has been shown as a single figure in our consolidated statement of financial position. The carrying amount of the investment is presented as $40 millon but, given the share price, I have calculated the fair value as $42 million. I thought that equity Investments that weren't consolidated needed to be measured at fair value. Please explain: 1. Why we aren't including Sandy as a subsidiary in our consolidated financial statements. 2. What method will have been used to arrive at the carrying amount of $40 milion rather than measuring the investment at talr value