Advanced financial accounting - Lecture 40. The main topics covered in this chapter include: the data will appear as row-wise and individual amount will be highlighted one by one; cost of investment in subsidiary Co.; less fair value of net assets; post acquisition of subsidiary Co.;... Please refer to the lecture for details!
Trang 1Lecture40
Trang 2Balance Sheet
as 31st December 2008
H (Rs) S (Rs) Fixed assets 1,000 550
Investment in S 750
Current assets 450 350
Total assets 2,150 900
Share capital 1,200 400
Current liabilities 250 200
Total liabilities & equities 2,150 900
The Holding Co.(H) acquired 80% share of the Subsidiary Co. (S) on 31st December 2008 when it’s reserves were worth Rs. 200 and the fair value of net assets of S were Rs. 300 more tan the book value.
Required: Prepare the Consolidated Balance Sheet as at 31st December 2008
Trang 3Holding % = 80%
Monitory % = 20%
Trang 4
Preacquisition Postacquisition
Reserves 200 100
Fair value 300 0
Trang 5Goodwill
Less Fair value of net assets (900 x 80%) 720
30
Trang 6Group Reserves
Post acquisition of subsidiary Co.(100x80%) 80
780
Trang 7Minority Interest
1,000 Minority interest = 1,000 x 20% = 200
Trang 8
Holding 80% 720 80 = 800 Minority 20% 180 20 = 200
Trang 9Solution Consolidate Balance Sheet
As 31st December 2008
H Rs Fixed Assets (1,000 +550+300) 1,850
Current Assets (400 + 350) 750 Total Assets 2,630 Owner’s Equity
Share Capital 1,200
Reserves 780
Minority Interest 200
2,180 Current Liabilities 450
2,630
Trang 10Balance Sheet
as 31st December 2008
H (Rs) S (Rs) Fixed assets 1,000 550
Investment in S 750
Current assets 450 350
Total assets 2,150 900
Share capital 1,200 400
Current liabilities 250 200
Total liabilities & equities 2,150 900
The Holding Co.(H) acquired 80% share of the Subsidiary Co. (S) on 31st December 2008 when it’s reserves were worth Rs. 200 and the fair value of net assets of S were Rs. 300 more tan the book value. The revaluation of assets of S were subject to application of Rs. 45 and goodwill impaired by
Rs. 6.
Required: Prepare the Consolidated Balance Sheet as at 31st December 2008
Trang 11Holding % = 80%
Monitory % = 20%
Trang 12
Preacquisition Postacquisition
Reserves 200 100
Fair value 300 0
Trang 13Goodwill
Less Fair value of net assets (900 x 80%) 720
30
24
Trang 14Group Reserves 780
738
Trang 15Minority Interest
955 Minority interest = 955 x 20% = 191
Trang 16
Minority Interest
1,000
191
Trang 1745
Minority Interest
45 x 20% = 4
Group
Reserve
45 x 80% = 36
Trang 18Solution Consolidate Balance Sheet
As 31st December 2008
H Rs Fixed Assets (1,000 +550+30045) 1,805
Current Assets (400 + 350) 750 Total Assets 2,579 Owner’s Equity
Share Capital 1,200
Reserves 738
Minority Interest 191
2,129 Current Liabilities (250+200) 450
2,579