You are also given the following information:

Howard acquired 1,200 million shares in Lynne on 1 January 20X1 for cash consideration of 1,600m.

Howard acquired 480 million shares in Claude on 1 January 20X2 for cash consideration of 800m.

The retained earnings of Lynne at 1 January 20X1 were 40m and the retained earnings of Claude at 1 January 20X2 were 360m.

The fair value of Lynne's plant at the date of acquisition was 60m in excess of its carrying value. This plant is depreciated straight line and had an estimated remaining useful life of 10 years at 1 January 20X1.

Howard uses the proportion of net assets method to calculate non-controlling interests, and the partial goodwill method.

Neither Lynne nor Claude have issued any shares since the acquisitions by Howard.

The directors do not consider that there has been any impairment in the investment in Claude.

An impairment test on 31 December 20X5 showed that consolidated goodwill should be written down by 40m.

During the year Claude sold goods to Howard. The sales value was 200m and the cost to Claude was 160m. 40% of the goods were still held by Howard at the year end. There were no intercompany receivables and payables relating to this transaction, as it was settled in cash immediately.

1.1) Prepare the consolidated statement of financial position for the Howard plc group as at 31 December 20X5.

1.2) Explain the adjustments you made for:

i. The fair value of plant in Lynne compared with the carrying value of the plant in Lynne's own books.

ii. Impairment of goodwill.

iii. Intercompany trading between Claude and Howard.

Below are the statements of financial position of Howard plc and its associated companies. Statements of financial position as at 31 December 20X5 Howard plc Lynne Ltd Claude Ltd 'm 'm 'm 'm 'm 'm Non-current assets Property, plant 1,400 1,560 1,900 & equipment Investments 2,400 3,800 1,560 1,900 Current assets Inventories Cash & bank 300 1,040 40 80 40 160 1,340 120 200 Total assets 5,140 1,680 2,100 2,720 1,500 1,200 Equity Share capital (1 shares) Retained earnings 1,980 132 776 4,700 1,632 1,976 Current liabilities Trade payables 440 48 124 5,140 1,680 Equity and liabilities 2,100