The summarised statement of financial position of Falcon plc and Kestrel Ltd at $31$ December $20$X$8$ were as follows:

Falcon plc Kestrel Ltd

$\text{'}$m $\text{'}$m

Net assets $($at fair values$)6825$

Ordinary share capital $1010$

Retained earnings $5815$

$6825$

On $1$ January $20$X$8$ Falcon plc purchased $80\%$ of the ordinary share capital of Kestrel Ltd for $24$ million. The fair value $($and carrying amount$)$ of the net assets of Kestrel Ltd was $20$ million on that date. Falcon plc adopts the partial approach to determine goodwill. The goodwill arising on consolidation was impaired by $100\%.$

What amount will the retained earnings be stated in Falcon plc$\text{'}$s consolidated statements of financial position as of $31$ December $20$X$8?$

Question $2$Answer

a$.$

$55$ million

b$.$

$62$ million

c$.$

$54$ million

d$.$

$50$ million