Question 2: Porter, a public limited company, is the parent of a listed group of companies which have a year end of 30 April 2020. Porters functional currency is the pound () and presents its individual and consolidated financial statements in . The statements of financial position for two entities as at 30 April 2020 are presented below:

	Porter	Belobe
	000	C'000
Non-current assets
Property, plant and equipment	15,025	7,234
Investment in Belobe at cost	9,150
	24,175	7,234
Current assets	4,000	4,266
Total assets	28,175	11,500
Equity and liabilities
Share capital	4,500	2,150
Retained reserves	19,175	6,730
	23,675	8,880
Current liabilities	4,500	2,620
Total equity and liabilities	28,175	11,500

Additional information

1. Porter acquired 75% of Belobe on 1 May 2019 for 9,150,000 when the retained reserves of Belobe were 3,155,000 Crowns. The functional currency of Belobe is Crowns.

2. The group policy is to value non-controlling interest at the proportionate share of the fair value of the net assets at acquisition.

3. Belobe made a profit of 3,575,000 Crowns for the year ended 30 April 2020.

4. The exchange rates between the and Crowns are as follows:

1 May 2019 1: 0.69 Crowns

30 April 2020 1: 0.62 Crowns

Average rate for the year ended 30 April 2020: 1: 0.64 Crowns

YOU ARE REQUIRED TO:

(a) Prepare the consolidated statement of financial position for the Porter group as at 30 April 2020.

(b) Prepare a reconciliation of the consolidated retained reserves figure showing the exchange gains and losses. (30 marks)

(c) Explain your calculation of goodwill and the treatment of exchange differences on goodwill for the year ended 30 April 2020. Your answer should refer to the relevant International Financial Reporting Standards (IAS/IFRS).(maximum word count 200 words) (20 marks) TOTAL 50 MARKS