Scenario 2: On December 31, 2019, Palm Co, a company that adopts IFRS, owned 54% of Rose Co, at which time Palm Co reported its investment at fair value through profit or loss owing to political instability in the country where Rose Co was located. On January 5, 2020, the management of Palm Co was satisfied that the political situation was stabilized and that the assets of Rose Co were no longer at risk of being transformed into public assets under the public ownership of a national government. Hence, Palm Co decided to prepare consolidated financial statements for the two companies for the year ended December 31, 2020.

to do financial statement.

Scenario 1: On January 1, 2020, Smile Co, a company that adopts IFRS, acquired 100% of Mars Co. Smile Co issued 100,000 shares of its BD10 ordinary shares, with a market price of BD15 on the date the acquisition was announced, and BD25 on the date the acquisition was completed, for all of Mars Co ordinary shares. The fair value of Mars Co's assets and liabilities equaled their respective carrying amounts except for land, which had a fair value that exceeded its book value by BD200,00. The fair value of Mars Co's identifiable intangibles is BD100,000, which will be amortized over a useful life of eight years. For the year ended December 31, 2020, Mars Co reported a net income of BD350,000 and paid cash dividends of BD150,000. The shareholders' equity section of each company's statement of financial position as of December 31, 2020, was: Smile Co 5,000,000 L,000,000 3,000,0000 BD9,000,000 Mars Co 1,000,000 400,000 500,000 BD1,900,000 Ordinary shares Share premium Retained earnings