The following draft financial statements relate to Mayfields, a public limited company.

Mayfields Group: Draft statements of profit or loss and other comprehensive income for the year ended 30 April 2020.

	Mayfields	NewPort	Oldford
	Kshs 'm	Kshs 'm	Kshs 'm
Revenue	800	230	140
Cost of Sales	-624	-130	-72
Gross Profit	176	100	68
Other income	42	14	4
Administrative costs	-30	-18	-24
Other expenses	-70	-38	-16
Operating profit	118	58	32
Finance costs	-10	-12	-8
Finance income	12	10	16
Profit before tax	120	56	40
Income tax expense	-38	-18	-10
Profit for the year	82	38	30
Other comprehensive income revaluation surplus	20	-	-
Total comprehensive income for year	102	38	30

The following information is relevant to the preparation of the group statement of profit or loss and other comprehensive income:

1. On 1 May 2018, Mayfields acquired 60% of the equity interests of NewPort, a public limited company. The purchase consideration comprised cash of KShs160 million and the fair value of the identifiable net assets acquired was KShs220 million at that date. The fair value of the non-controlling interest (NCI) in NewPort was KShs90 million on 1 May 2018. Mayfields wishes to use the full goodwill method for all acquisitions. The share capital and retained earnings of NewPort were KShs50 million and KShs130 million respectively and other components of equity were KShs12 million at the date of acquisition. The excess of the fair value of the identifiable net assets at acquisition is due to non-depreciable land. Goodwill has been impairment tested annually and as at 30 April 2019 had reduced in value by 20%. However at 30 April 2020, the impairment of goodwill had reversed and goodwill was valued at KShs4 million above its original value. This upward change in value has already been included in above draft financial statements of Mayfields prior to the preparation of the group accounts.
2. Mayfields disposed of an 8% equity interest in NewPort on 30 April 2020 for a cash consideration of KShs36 million and had accounted for the gain or loss in other income. The carrying value of the net assets of NewPort at 30 April 2020 was KShs240 million before any adjustments on consolidation. Mayfields accounts for investments in subsidiaries using IFRS 9 Financial Instruments and has made an election to show gains and losses in other comprehensive income. The carrying value of the investment in NewPort was KShs180 million at 30 April 2019 and KShs190 million at 30 April 2020 before the disposal of the equity interest.
3. Mayfields acquired 60% of the equity interests of Oldford, a public limited company, on 30 April 2018. The purchase consideration was cash of KShs140 million. Oldfords identifiable net assets were fair valued at KShs172 million and the NCI had a fair value of KShs28 million at that date. On 1 November 2019, Mayfields disposed of a 40% equity interest in Oldford for a consideration of KShs100 million. Oldfords identifiable net assets were KShs180 million and the value of the NCI was KShs68 million at the date of disposal. The remaining equity interest was fair valued at KShs80 million. After the disposal, Mayfields exerts significant influence. Any increase in net assets since acquisition has been reported in profit or loss and the carrying value of the investment in Oldford had not changed since acquisition. Goodwill had been impairment tested and no impairment was required. No entries had been made in the financial statements of Mayfields for this transaction other than for cash received.

4. Mayfields sold inventory to NewPort for KShs24 million at fair value. Mayfields made a loss on the transaction of KShs4 million and NewPort still holds KShs16 million in inventory at the year end.
5. The following information relates to Mayfieldss pension scheme:

KShsm

Plan assets at 1 May 2019 96

Defined benefit obligation at 1 May 2019 100

Service cost for year ended 30 April 2020 8

Discount rate at 1 May 2019 10%

Re-measurement loss in year ended 30 April 2020 4

Past service cost 1 May 2019 6

The pension costs have not been accounted for in total comprehensive income.

6. On 1 May 2018, Mayfields purchased an item of property, plant and equipment for KShs24 million and this is being depreciated using the straight line basis over 10 years with a zero residual value. At 30 April 2019, the asset was revalued to KShs26 million but at 30 April 2020, the value of the asset had fallen to KShs14 million. Mayfields uses the revaluation model to value its non-current assets. The effect of the revaluation at 30 April 2020 had not been taken into account in total comprehensive income but depreciation for the year had been charged.
7. On 1 May 2018, Mayfields made an award of 8,000 share options to each of its seven directors. The condition attached to the award is that the directors must remain employed by Mayfields for three years. The fair value of each option at the grant date was KShs200 and the fair value of each option at 30 April 2020 was KShs220. At 30 April 2019, it was estimated that three directors would leave before the end of three years. Due to an economic downturn, the estimate of directors who were going to leave was revised to one director at 30 April 2020. The expense for the year as regards the share options had not been included in profit or loss for the current year and no directors had left by 30 April 2020.
8. A loss on an effective cash flow hedge of NewPort of KShs6 million has been included in the subsidiarys finance costs.
9. Ignore the taxation effects of the above adjustments unless specified. Any expense adjustments should be amended in other expenses.

Required:

• (a) Prepare a consolidated statement of profit or loss and other comprehensive income for the year ended 30 April 2020 for the Mayfields Group.
• (b) Explain, with suitable calculations, how the sale of the 8% interest in NewPort should be dealt with in the group statement of financial position at 30 April 2020.