Question 3 (30 marks) (A) The following are the summarised statements of financial position for Handa Plc and Akeyo Ltd at 31 March 2018, the end of their accounting years: Statements of financial position at 31 March 2018 Handa Pic Non-current assets m Property, plant and equipment 4,700 Investment - 80m ordinary shares in Akeyo Ltd 400 -100m 8% debentures in Akeyo Ltd 100 Akeyo Ltd m 500 20 Current assets Inventory Receivables Cash and cash equivalent 100 50 5,425 25 595 Equity and reserves Ordinary 1 shares Share premium account Retained earnings 1,000 1,100 2,675 100 200 145 Non-current liabilities 8% Debentures 400 Current liabilities Payables Owed to Akeyo Ltd Bank overdraft 200 32 18 5,425 595 The following information is also available: 1) On 1 April 2017 Handa Plc acquired share capital in Akeyo Limited. At that date the retained earnings of Akeyo Limited amounted to 45m. Each ordinary share in Akeyo Ltd carries one vote and there are no voting rights other than those attached to the ordinary shares. Akeyo Ltd has not issued any shares since its acquisition by Handa Plc. 2) On 1 April 2017 the fair value of Akeyo Limited's property, plant and equipment was 100m higher than book value. This is not reflected in the statement of financial position above. No adjustments are necessary for depreciation during the year ended 31 March 2018. At 31 March 2018 Handa Plc's inventory includes 25m relating to goods purchased from Akeyo Ltd. These goods had cost Akeyo Ltd 15m. Required Calculate goodwill arising on the acquisition of Akeyo Ltd at 1 April 2017 (4 marks) Calculate consolidated retained earnings at 31 March 2018. (3 marks) (iii) Calculate the non-controlling interest at 31 March 2018. (3 marks) Prepare a consolidated statement of financial position for Handa Plc at 31 March 2018. (6 marks) Explain with supporting calculations how your answers above would differ if a review at 31 March 2018 established impairment of goodwill amounting to 17m. (Note that you do not need to re- produce the entire consolidated statement of financial position) (3 marks) (vi) With reference to IAS 38 and / or IFRS 3, explain how the business would treat non-purchased (or internally generated) goodwill in its financial statements. Is it possible at some future date for Handa Plc to revalue upwards the goodwill in (i) above? (3 marks) Note: Round all numbers to nearest million (ie no decimal places)