The following are the financial statements of the parent company Alpha plc, a subsidiary company Beta and
Question:
On 1 January 20X5 Alpha plc acquired 80% of Beta plc for £216,000 when Beta plcs share capital and reserves were £81,000 and 30% of Gamma Ltd for £156,600 when Gamma Ltds share capital and reserves were £40,500. The fair value of the land at the date of acquisition was £337,500 in Beta plc and £270,000 in Gamma Ltd. Both companies have kept land at cost in their statement of financial position. All other assets are recorded at fair value. There have been no further share issues or purchases of land since the date of acquisition.
At the year end, Alpha plc has inventor y acquired from Beta plc and Gamma Ltd. Beta plc had invoiced the inventor y to Alpha plc for £54,000 the cost to Beta plc had been £40,500 and Gamma Ltd had invoiced Alpha plc for £13,500 the cost to Gamma Ltd had been £8,100. Goodwill has been impaired by £52,650. The whole of the impairment relates to Beta.
Non-controlling interests are measured using method 1.
Required:
Prepare Alpha plcs consolidated statement of financial position as at31.12.20X9.
Goodwill is an important concept and terminology in accounting which means good reputation. The word goodwill is used at various places in accounting but it is recognized only at the time of a business combination. There are generally two types of... Financial Statements
Financial statements are the standardized formats to present the financial information related to a business or an organization for its users. Financial statements contain the historical information as well as current period’s financial...
Step by Step Answer:
Financial Accounting and Reporting
ISBN: 978-0273744443
14th Edition
Authors: Barry Elliott, Jamie Elliott