ACCA paperanswers section 1 introduction the group statement of financial position

Section 1 Introducing the group statement of financial position Answer 1 Lion W1 Group structure Parent Subsidiary W2 Net assets of the subsidiary The rise in the net assets is $140m =

Section 1 Introducing the group statement of financial position

Answer 1 Lion

W1 Group structure

Parent

Subsidiary W2 Net assets of the subsidiary

The rise in the net assets is $140m = post-acquisition profits and allocated 75% to the parent w5 and 25% to the NCI w4

W3 Goodwill

$m

W4 NCI

$m

Plus the NCI% in the subsidiary's post-acquisition profits (25% x 140) 35

W5 Retained earnings

$m

Plus the parent's % in the subsidiary's post-acquisition profits (75% x 140) 105

265 Group statement of financial position

$m

1,390

1,390

A student's guide to Group Accounts by Tom Clendon, Second Edition, published by Kaplan Publishing

Section 1 Introducing the group statement of financial position

Answer 2 Tiger

W1 Group structure

Parent

Subsidiary W2 Net assets of the subsidiary

The rise in the net assets is $200m = post-acquisition profits and allocated 60% to the parent w5 and 40% to the NCI w4

W3 Goodwill

$m

W4 NCI

$m

Plus the NCI% in the subsidiary's post-acquisition profits (40% x 200) 80

W5 Retained earnings

$m

Plus the parent's % in the subsidiary's post-acquisition profits (60% x 200) 120

520 Group statement of financial position

$m

2,950

2.950

A student's guide to Group Accounts by Tom Clendon, Second Edition, published by Kaplan Publishing