Sm Consolidation Bravado, a public limited company, has acquired two subsidiaries and an associate. The draft statements of financial position are as follows at 31 May 20X9. Bravado Message Moxted Assets Sm Sm Non-current assets Property, plant and equipment 265 230 161 Investments in subsidiaries: Message 300 Mixed 133 Investment in associate: Clarity 20 Investment in equity instruments 51 769 236 166 Current assets Inventories 135 Trade receivables 91 Cash and cash equivalents 102 100 328 200 113 Total assets 1.097 436 279 11 R$ *l 520 Equity and liabilities Share capital Retained earnings Other components of equity Total equity 220 150 240 100 80 374 187 Non-current liabilities Long-term borrowings Deferred tax 15 120 25 KAN 3 1 The following information is relevant to the preparation of the group financial statements. DOA i. On 1 June 20x8. Bravado acquired 80% of the equity interests of Message, a private entity. The purchase consideration comprised cash of $300 milion. The fair value of the identifiable net assets of Message was $400 million, including any related deferred tax liability arising one acquisition. The owners of Message had to dispose of the entity for tax purposes by a specified date, and therefore sold the entity to the first company to bid for it, which was Bravado. An independent valuer has stated that the fair value of the non-controlling interest in Message was 586 million on 1 June 20x8. Bravado does not wish to measure the non-controlling interest in subsidiaries on the basis of the proportionate interest in the identifiable net assets, but wishes to use the Yull goodwill method. The retained earnings of Message were $136 million and other components of equity were $4 million at the date of acquisition There has been no new issue of capital by Message since the date of acquisition and the excess of the fair value of the net assets is due to an increase in the value of non-depreciable land. ii. On 1 June 20X7, Bravado acquired 6% of the ordinary shares of Mixted. Bravado had treated this as an investment in equity instruments at fair value in the financial statements to 31 May 20x8, and had made an irrevocable election (see Note (d)) to recognise changes in fair value in other comprehensive income. There were no changes in the fair value of Moded in the year to 31 May 20X9. On 1 June 20x8, Bravado acquired a further 64% of the ordinary shares of Moxted and gained control of the company. The consideration for the acquisitions was as follows: Holding Consideration % Sm 1 June 20x7 6 1 June 20x8 64 118 128 6 10 Sm Consolidation Bravado, a public limited company, has acquired two subsidiaries and an associate. The draft statements of financial position are as follows at 31 May 20X9. Bravado Message Moxted Assets Sm Sm Non-current assets Property, plant and equipment 265 230 161 Investments in subsidiaries: Message 300 Mixed 133 Investment in associate: Clarity 20 Investment in equity instruments 51 769 236 166 Current assets Inventories 135 Trade receivables 91 Cash and cash equivalents 102 100 328 200 113 Total assets 1.097 436 279 11 R$ *l 520 Equity and liabilities Share capital Retained earnings Other components of equity Total equity 220 150 240 100 80 374 187 Non-current liabilities Long-term borrowings Deferred tax 15 120 25 KAN 3 1 The following information is relevant to the preparation of the group financial statements. DOA i. On 1 June 20x8. Bravado acquired 80% of the equity interests of Message, a private entity. The purchase consideration comprised cash of $300 milion. The fair value of the identifiable net assets of Message was $400 million, including any related deferred tax liability arising one acquisition. The owners of Message had to dispose of the entity for tax purposes by a specified date, and therefore sold the entity to the first company to bid for it, which was Bravado. An independent valuer has stated that the fair value of the non-controlling interest in Message was 586 million on 1 June 20x8. Bravado does not wish to measure the non-controlling interest in subsidiaries on the basis of the proportionate interest in the identifiable net assets, but wishes to use the Yull goodwill method. The retained earnings of Message were $136 million and other components of equity were $4 million at the date of acquisition There has been no new issue of capital by Message since the date of acquisition and the excess of the fair value of the net assets is due to an increase in the value of non-depreciable land. ii. On 1 June 20X7, Bravado acquired 6% of the ordinary shares of Mixted. Bravado had treated this as an investment in equity instruments at fair value in the financial statements to 31 May 20x8, and had made an irrevocable election (see Note (d)) to recognise changes in fair value in other comprehensive income. There were no changes in the fair value of Moded in the year to 31 May 20X9. On 1 June 20x8, Bravado acquired a further 64% of the ordinary shares of Moxted and gained control of the company. The consideration for the acquisitions was as follows: Holding Consideration % Sm 1 June 20x7 6 1 June 20x8 64 118 128 6 10
