Solution Far450 - Dec 2014
Solution Far450 - Dec 2014
Solution Far450 - Dec 2014
SUGGESTED SOLUTION
QUESTION 1
a) Gain or loss on the subsequent acquisition of Juara Bhd
RM
Million
Consideration transferred
Fair value of net assets on 1/7/13
OSC
Retained profit
2000
1240
3240 x 15%
Dr Non-Controlling interest
Cr Other component of equity
Cr Investment
RM
Million
480
(486)
6
RM
Million
6
480
RM
Million
2500
805
3305
2000
1220
3220
85
Goodwill on consolidation
Goodwill on consolidation-Gagah Bhd
RM
Million
Consideration transferred
NCI (40%x6150)
RM
Million
3,614
2,460
6,074
4000
1490
160
500
(6,150)
(76)
Bargain purchase
1
RM
Million
Group RP
RM
Million
NCI
RM
Million
805
(486)
2,460
1240
(1220)
20
240
(75%) 15
(90%) 216
(25%) 5
(10%) 24
(60%) 138
(40%) 92
7565
76
(0.4)
90
8,099.6
2,900
240
(10)
230
21,406
85
25,062.1
_______
46,553.1
11,600
3,850
8.099.6
6
2,900
5210
14,887.5
46,553.1
(50 x = 25 marks)
c.
Hebat Bhd cannot be excluded from consolidation on the grounds of dissimilar activities.
If a group contains diverse business activities, relevant information is to be provided by
consolidating such subsidiary and disclosing additional information in the consolidated
financial statement about the different business activities of the subsidiary ie. segment
disclosure.
(5 x 1 = 5 marks)
(Total: 35 marks)
QUESTION 2
(a)
RMmillion
720
(100)
350
98.5
10
___(35)
1,043.5
W1
(8 x = 4 marks)
W1
Goodwill
RMmillion
Bal b/d
Acquisition
(b)
Goodwill on acquisition of Laut Bhd:
CT
+) NCI (25%x2430)
FVNA
Goodwill (given)
RMmillion
98.5
940
861 Impairment
177.5 Bal c/d
2200+420+300+140-630
RMmillion
2,000
607.5
2,607.5
(2,430)
177.5
(c)
Cash flows from financing activities
Proceeds from issue of share capital
Issue of 5% debenture
Dividend paid to non controlling interest
Dividend paid
RMmillion
W2 2,960
600
W3(19.5)
W4 (499)
(14 x = 7 marks)
Bal c/d
W2 OSC
RMmillion
Bal b/d
Acq of sub
18560 New issue
RMmillion
15000
1000
2560
Bal c/d
W2 SP
RMmillion
Bal b/d
Acq of sub
940 New issue
RMmillion
340
200
400
W3 NCI
RMmillion
19.5 Bal b/d
Acq of sub
2704 Profit
RMmillion
2000
607.5
116
Dividend
Bal c/d
Dividend
Bal c/d
W4 RP
RMmillion
499 Bal b/d
2070 Profit attributable
RMmillion
2220
349
QUESTION 3
a)
Smile Bhd
Consolidated Statement of Profit or Loss and Other Comprehensive Income
For the Year ended 30 June 2014P
RM000
Revenue
Cost of sales
Gross profit
Income from other
Investments
Bargain purchase
Operating expenses
Finance cost
Share of associate's profit
Profit before tax
Taxation
Profit for the year
Other comprehensive incomeP
FV gain on AFS
Total comprehensive income
167,110
(74,380)
92,730
1,875
1,500 P
(23,075)
(5,775)
1,975
69,230
(16,850)
52,380
450 P
52,830
Profit attributable:
Owners of the parent
NCI (W1)
42,471 P
9,909
52,380
42,921 P
9,909 P
52,830
3,474
6,435
9,909
(34P x = 17 marks)
P** Examiners: Award this tick if students do not show the adjustment for the depreciation
from the sale of equipment by Giggle to Laugh . This is a preacquisition sale and should not
have any effect on depreciation.
b)
Smile Bhd
Consolidated Statement of Changes in Equity
for the year ended 30 June 2014 P
RP
RM000
Balance brought forward
Consideration transferred : Giggle
(28,700 x 30%)
Acquisition drg the year
Profit for the year
TCI for the year
Ordinary dividend paid
Balance carried forward
(W2) 27,450
Wave -b/f
Preacquisition
Post acquisition
Underdepreciation (1 yr)
(W3) 8,900
(8,610) PP
10,750 P
42,471
(2,500) P
67,421
=====
9,909
(W4) (400)
20,549
=====
RM000
20,000
750 P
W2 RP Bal b/f
Grp bal b/f
Bargain purchase - Laugh
Laugh - bal b/f
Preacquisition
Post acquisition
NCI
RM000
18,000
(10,000) P
8,000
x 70% P
5,600
8,000
(3,500) P
4,500
(100) P
4,400
x 25% P
W3 NCI b/f
Laugh
FV on DOA (1/7/2011)
RP from 1/7/2011 to 30/06/2013
1,100
27,450
RM000
8,000P x 30%P
6,500
2,400
8,900
W4 Dividends to NCI
Laugh
Giggle
RM000
300 P
100 P
400
1,000 x 30%
500 x 20%
(16P x = 8 marks)
QUESTION 4A(i)a
Mawar Bhd disposed part of its interest (25%) but retains sufficient shares (60%) to exert
control over Cempaka Bhd after the disposal date. Therefore, there is no change in the
relationship as Mawar Bhd is still the parent & retains control of Cempaka Bhd although
there is a decrease in the controlling interest.
( 6 X mark each = 3 marks)
QUESTION 4A(i)b
With the decrease in the controlling interest of Mawar Bhd in Cempaka Bhd, the noncontrolling interest would therefore increase from 20% to 40% after the disposal date.
( 4 X mark each = 2 marks)
QUESTION 4A(ii)
Proceed
Carrying value of investment
Net assets on 1/1/2014
Goodwill
2.5m x 25%
4.5 m x 20%
Gain on disposal
Mawar Bhds
financial statement
RMmill
Groups
Consolidated
financial statement
RMmill
1
(0.625)
______
(0.9)
-
______
0.375
__0.1
QUESTION 4A(iii)
It is necessary to compute for both Mawar Bhds financial statement and the groups
consolidated financial statement because the gain or loss on disposal in Mawar Bhds
financial statement is the difference between the proceeds received/receivable from the
disposal of interest in the subsidiary less the carrying value of the assets/investment .
Meanwhile, the gain or loss on disposal for consolidation purposes is the difference between
the proceeds received/receivable less the proportionate amount of net assets of the
subsidiary existing on the date of disposal . In this case, the parents share of the postacquisition increase in the net assets of the subsidiary has been recognized. This takes
into account the related net assets of the subsidiary that are being disposed of and not just
the carrying amount of the investment.
(10 x mark each = 5 marks)
QUESTION 4B(i)
The 48% interest in Puncak Bhd held by Alam Bhd would be sufficient to give it control of
Puncak Bhd. This is based on the absolute size of its holding and the relative size of the
other shareholdings in Puncak Bhd, which give Alam Bhd sufficient dominant voting
interest to meet the power criterion without the need to consider any other evidence of
power.
5 x 1 mark each = 5 marks
QUESTION 4B(ii)
Sering Bhd does not have power over Perdana Bhd based on the size of Sering Bhds
voting interest and its size relative to the other shareholdings. Tabah Bhd and Medan Bhd
just need to cooperate to be able to prevent Sering Bhd from directing the relevant
activities of Perdana Bhd.
5 x 1 mark each = 5 marks