Question $6$

Below are statements of financial position for three companies as at $31$ July $2022$

Statements of financial Position as at $31$ July $2022$

Father

Brother

Nephew

GH$$ million

GH$$ million

GH$$ million

Non$-$current assets

Property, plant and equipment

$3,888$

$1,680$

$1,224$

Investments

$3,560$

$2,600$

$200$

Current assets

Inventories

$1,080$

$368$

$300$

Trade receivables

$1,376$

$416$

$100$

Cash and bank

$368$

$104$

$64$

Total assets

$10,272$

$5,168$

$1,888$

Equity

Share capital $($GH$1$ each$)$

$4,000$

$1,200$

$640$

Revaluation reserve

$2,400$

$960$

$400$

Retained earnings

$1,432$

$800$

$760$

Current liabilities

Trade payables

$1,144$

$1,080$

$56$

Taxation

$1,296$

$1,128$

$32$

Equity and liabilities

$10,272$

$5,168$

$1,888$

Additional Information:

i$)$

Father Plc $($Father$)$ bought $720$ million shares in Brother Plc $($Brother$)$ on $1$ August $2020,$ at a cost of GH$2\mathrm{.}50$ per share paid in cash. On that date, the retained earnings of Brother stood at GH$480$ million and the revaluation reserved was GH$320$ million.

ii$)$

On $1$ August $2021,$ Brother bought $512$ million shares in Nephew Plc $($Nephew$)$ for cash of GH$4$ per share. On that date, the retained earnings reserve of Nephew stood at GH$664$ million, and the revaluation reserve at GH$360$ million.

iii$)$

Nephew controls a famous brand name $$You$-$Start$,$ estimated to have a useful economic life of $20$ years from $1$ August $2021$ with a fair value as at the same date of GH$40$ million. This has not been recognised in the books of accounts.

iv$)$

Father wishes to use the fair value method to measure the non$-$controlling interests of Brother at the acquisition date. The share price of GH$2\mathrm{.}50$ should be used for this purpose. Non$-$controlling interest in Nephew is measured at proportion of net assets acquired.

$4$

v$)$

On $31$ July $2022,$ goodwill was assessed for impairment, and the calculation showed that an impairment loss of GH$40$ million would be recognised in the case of Brother, and GH$20$ million in the case of Nephew. No impairment losses had been recognised in the year to $31$ July $2021.$

vi$)$

During the year, Brother bought goods from Nephew for a total sum of GH$16$ million. These goods cost Nephew GH$12$ million. $60\%$ of the goods remained unsold by Brother at the reporting date.

vii$)$

Included in the receivable figure is sales of $$10$ million made to a foreign customer on $1$ January $2022.$ The rate on that date was $$1$: GH$12.$ No payment has been received for this transaction and the rate at $31$ July $2022$ was $$1$: GH$13\mathrm{.}50.$

viii$)$

On $1$ August $2021,$ Father enters into a five$-$year lease of a building which has a remaining useful life of ten years. Lease payments are GH$50$ million per annum, payable at the beginning of each year. The lessee incurs initial direct costs of GH$3$ million and receives lease incentives of GH$1,000,000.$ There is no transfer of the asset at the end of the lease and no purchase option. The interest rate implicit in the lease is not immediately determinable but the lessee$$s incremental borrowing rate is $5\%.$ Apart from the initial recognition of the lease, no other entries have been made.

Required: Prepare a Consolidated Statement of Financial Position for the Father Group for year ended $31$ July $2022$ in accordance with IFRS.