The Statements of Financial Position of O'Mahony Ltd and Best Ltd as at 31 December 2018 are as follows: The following additional information is available: 1. O'Mahony Ltd acquired 208,000 shares in Best Ltd on 31 December 2016 when the share premium and retained earnings were 10,000 and 80,000 respectively. The nominal value of the shares in O'Mahony Ltd and Best Ltd is 1. No shares have been issued since 31 December 2016. 2. The dividends declared by both O'Mahony Ltd and Best Ltd have been approved prior to the 31 December 2018. 3. At acquisition date, the fair value of the non-current assets of Best Ltd was 50,000 higher than their book value at that date. This valuation has not been reflected in the books of Best Ltd. 4. During the year ended 31 December 2018, Best Ltd sold goods to O'Mahony Ltd for 35,000. These goods were sold for at cost plus a mark-up of 25%. These goods are still on hand at the 31 December 2018. 5. Goodwill has been impaired by 12,000 in 2018 , the first time since the acquisition of Best Ltd. Required Prepare a Consolidated Statement of Financial Position for the O'Mahony Group as at 31 December 2018. (13 marks) (b) (1) Define the terms 'provision', 'contingent liability' and 'contingent asset' as used in IAS 37, Provisions, Contingent Liabilities and Contingent Assets. (3 marks) (2) How does the guidance provided on provisions help enhance the reliability of financial statements? (5 marks) (c) Explain how negative goodwill arises on the acquisition of a subsidiary, and how this negative goodwill is accounted for in the group accounts. (4 marks) Total 25 marks End of Paper The Statements of Financial Position of O'Mahony Ltd and Best Ltd as at 31 December 2018 are as follows: The following additional information is available: 1. O'Mahony Ltd acquired 208,000 shares in Best Ltd on 31 December 2016 when the share premium and retained earnings were 10,000 and 80,000 respectively. The nominal value of the shares in O'Mahony Ltd and Best Ltd is 1. No shares have been issued since 31 December 2016. 2. The dividends declared by both O'Mahony Ltd and Best Ltd have been approved prior to the 31 December 2018. 3. At acquisition date, the fair value of the non-current assets of Best Ltd was 50,000 higher than their book value at that date. This valuation has not been reflected in the books of Best Ltd. 4. During the year ended 31 December 2018, Best Ltd sold goods to O'Mahony Ltd for 35,000. These goods were sold for at cost plus a mark-up of 25%. These goods are still on hand at the 31 December 2018. 5. Goodwill has been impaired by 12,000 in 2018 , the first time since the acquisition of Best Ltd. Required Prepare a Consolidated Statement of Financial Position for the O'Mahony Group as at 31 December 2018. (13 marks) (b) (1) Define the terms 'provision', 'contingent liability' and 'contingent asset' as used in IAS 37, Provisions, Contingent Liabilities and Contingent Assets. (3 marks) (2) How does the guidance provided on provisions help enhance the reliability of financial statements? (5 marks) (c) Explain how negative goodwill arises on the acquisition of a subsidiary, and how this negative goodwill is accounted for in the group accounts. (4 marks) Total 25 marks End of Paper