Deegan5e Sm Ch32

8/20/2019 Deegan5e Sm Ch32

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Chapter 32

Further consolidation issues IV: Accounting for changes in degree of

ownership of a subsidiary

32.1 AASB 127 requires that where a parent entity’s loss of control of a subsidiary occurs duringa financial year, the consolidated incoe stateent shall include the results of the subsidiaryfor that part of the financial year during which the parent entity had control of thesubsidiary.

32.2 !ro the indi"idual perspecti"e of the parent entity, the profit or loss on sale of the shareswill be the difference between the carrying "alue of the shares #at cost or at a fair "alue

pursuant to AASB 13$% and the fair "alue of the sales proceeds. !ro the group’s perspecti"e, howe"er, consideration ust be gi"en to the econoic entity’s share of post&acquisition profits and reser"e o"eents less any ad'ustents for ipairent of purchasedgoodwill before we are able to deterine the profit or loss on sale. (ence, profit on sale iscalculated differently fro the perspecti"e of the parent entity and fro the perspecti"e of the econoic entity, and so we would not e)pect the twp profits to be the sae.

32.3 *es we do need to +now the fair "alue of the in"estee’s net assets at e"ery in"estent date.f we do not consider the fair "alue of the assets at each acquisition date then we will notobtain a correct easure of total purchased goodwill. As paragraph - of AASB 3 /Business0obinations’ states

A business combination may involve more than one exchange transaction, for example when it occurs in stages by successive share purchases. If so, each

exchange transaction shall be treated separately by the acquirer, using the cost of

the transaction and fair value information at the date of each exchangetransaction, to determine the amount of any goodwill associated with that

transaction. This results in a step-by-step comparison of the cost of the individual investments with the acquirer’s interest in the fair values of the acquiree’s

identifiable assets, liabilities and contingent liabilities at each step.

he abo"e /step&by&step approach’ requires that

• ach indi"idual in"estent in the subsidiary is accounted for separately, eaning that

we will ha"e ultiple consolidation eliination entries.

• 4nce control of the subsidiary is established, the consolidation wor+sheet entries will

eliinate the "arious in"estents in the subsidiary against the parent entity’s respecti"eshare of the subsidiary’s net identifiable assets as at the respecti"e in"estent dates #atfair "alue%. his will include in"estents ade prior to gaining control of the subsidiary.

• Because eliinations of each in"estent are ade as at the "arious in"estent dates we

need to restate the subsidiary’s assets to fair "alue as at each e)change date. his eans

that we ight ha"e nuerous entries to re"alue the net assets to fair "alue.

Solutions 5anual t6a Australian inancial Accounting -6e by 0raig eegan 3281


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• !or each in"estent eliination we will calculate a separate aount of goodwill. his

eans that the total goodwill acquired for a subsidiary could be the su of a nuber of indi"idual transaction calculations as reflected in a nuber of in"estent eliinationentries.

(ence, where there are a series of in"estents in a subsidiary we will need to re"alue theassets of the subsidiary to fair "alue as at the date of each separate in"estent. n relation tosuch a series of re"aluations, paragraph -$ of AASB 3 states

!hen a business combination involves more than one exchange transaction, the fair values of the acquiree’s identifiable assets, liabilities and contingent liabilities may

be different at the date of each exchange transaction. "ecause#

$a% the acquiree’s identifiable assets, liabilities and contingent liabilities are

notionally restated to their fair values at the date of each exchange transaction

to determine the amount of any goodwill associated with each transaction&

and

$b% the acquiree’s identifiable assets, liabilities and contingent liabilities must thenbe recognised by the acquirer at their fair values at the acquisition date,

any ad'ustment to those fair values relating to previously held interests of the

acquirer is a revaluation and shall be accounted for as such. (owever, because thisrevaluation arises on the initial recognition by the acquirer of the acquiree’s assets,

liabilities and contingent liabilities, it does not signify that the acquirer has elected to apply an accounting policy of revaluing those items after initial recognition in

accordance with, for example, AA)" **+ 9roperty, 9lant and quipent.

32.: 4nce control of the subsidiary is established, the consolidation wor+sheet entries willeliinate the "arious in"estents in the subsidiary against the parent entity’s respecti"eshare of the subsidiary’s net identifiable assets as at the respecti"e in"estent dates #at fair "alue%. his will include in"estents ade prior to gaining control of the subsidiary. t isephasised that the series of eliinations of past in"estent transactions only coenceswhen the parent entity establishes control.

4nce control is established each past and future in"estent in the subsidiary is accountedfor separately, eaning that we will ha"e ultiple consolidation eliination entries.

!or each in"estent eliination we will calculate a separate aount of goodwill. hiseans that the total goodwill acquired for a subsidiary could be the su of a nuber of indi"idual transaction calculations as reflected in a nuber of in"estent eliinationentries.

32.- #a% As the te)tboo+ states, within the financial stateents of the parent entity, thein"estent in the subsidiary would be shown at cost, or perhaps, at fair "alue. !rothe perspecti"e of the parent entity alone, the profit or loss on sale of the shares will

be the difference between the carrying "alue of the shares #at cost, or at fair "alue%,and the "alue of the sales proceeds.



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#b% !ro the group’s #or econoic entity’s% perspecti"e, howe"er, consideration ust begi"en to the econoic entity’s share of post&acquisition profits and reser"eo"eents and any ipairent of purchased goodwill before we are able todeterine the profit or loss on sale. hat is, the gain or loss to the econoic entitywould be deterined as the difference between the sale price, and the su of the

original cost of the ownership interest sold and the share of the post&acquisitiono"eents in the entity’s profits and reser"es #the post&acquisition o"eentswould include the recognition of any goodwill ipairent%.

32.; Accounting for first acquisition

? ?0ost of acquisition : === ===!air "alue of identifiable assets === ===4wnership interest :=>

3 2== ===

9urchased goodwill ? == ===

r Share capital :== ===r @eneral reser"e ;== ===r Asset re"aluation reser"e ;== ===r etained earnings 1 ;== ===r @oodwill == ===0r n"estent in 5 : === ===

liination of C’s first acquisition of := per cent of the share capital of 5 against the pre&acquisition equities of 5 at the date of the initial acquisition.

Accounting for second acquisition

? ?0ost of acquisition 1 2== ===!air "alue of identifiable assets $ == ===4wnership interest 12>

1 17; ===9urchased goodwill ? 2: ===

r Share capital 12= ===r @eneral reser"e 2:= ===r Asset re"aluation reser"e 2:= ===r etained earnings -7; ===r @oodwill 2: ===0r n"estent in 5 1 2== ===

liination of C’s second acquisition of 12 per cent of the share capital of 5 against the pre&acquisition equities of 5 at the date of the second acquisition.

Accounting for third acquisition

? ?



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0ost of acquisition : :== ===!air "alue of identifiable net assets 1= 2== ===4wnership interest 3>

3 7; ===9urchased goodwill -2: ===

r Share capital 3= ===r @eneral reser"e 3; ===r Asset re"aluation reser"e 7;= ===r etained earnings 1 $== ===r @oodwill -2: ===0r n"estent in 5 : :== ===

liination of C’s final acquisition of 3 per cent of the share capital of 5 against the pre&acquisition equities of 5 at the date of the final acquisition.

f the consolidation is to be treated using the step&by&step acquisition ethod #the ethodused abo"e% the following aggregated consolidation 'ournal entry would be raised as at 3=Cune 2==$.

40% 2% 3!% "otal

r Share capital :== === 12= === 3= === $== ===r @eneral reser"e ;== === 2:= === 3; === 1 ;7; ===r Asset re"aluation reser"e ;== === 2:= === 7;= === 1 ;== ===r etained earnings 1 ;== === -7; === 1 $== === : =7; ===r @oodwill == === 2: === -2: === 1 3: ===0r n"estent : === === 1 2== === : :== === $ ;== ===

5inority interest

At 3= Cune 2==$ the inority interest in 5 Dtd is 1= per cent of the net assets. hisequates to =.1= E ?11 7== === F ?1 17= ===.

n considering the o"eents in retained earnings during the year, we can see fro theabo"e aggregated entry that ?: =7; === of the retained earnings of 5 has been treated as

pre&acquisition. As retained earnings of 5 has increased fro ?: === === to ?- -== ===

during the period, ?1 :2: === will be treated as post&acquisition earnings, of which inorityinterests ha"e a ?--= === share.

n ters of the balance sheet, the following disclosures ay be found

)tract fro the 3= Cune 2==$ balance sheet of C Dtd and its controlled entities.

#arent entity $inority "otal

interest interest

000 000 000

Shareholders’ funds

Share capital G 1== G@eneral reser"e G 22= G

Solutions 5anual t6a Australian inancial Accounting -6e by 0raig eegan 328:


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Asset re"aluation reser"e G 3== Getained earnings G --= G

G 1 17= G

G nsufficient inforation about the parent entity account balances.

32.7&ichards "winny

'li(inations and

ad)ust(ents Consolidated

Co(pany Co(pany *r Cr state(ent

000 000 000 000 000

ncoe stateent9rofit before ta) 1 2== 2== 1;=3 12:=a) ;== = ;=9rofit after ta) ;== 12= -;=etained earnings

3= Cune 2==7

2 === == 2:=1,

32=2

2 2:=2 ;== $2= 2 ==

i"idends proposed 2== 1;= 1;=3 2==

Balance sheetShareholders’ equityetained earnings3= Cune 2==

2 :== 7;= 2 ;==

Share capital === 2 === 12==1,==2

===

e"aluation reser"e 2== =2 12=

0urrent liabilitiesAccounts payable :== := ::=i"idends payable 2== 1;= 1;=: 2==

Hon&current liabilitiesDoans 1 === := 1 :=

12 === : === 13 2==

0urrent assets

0ash 3:= 2== -:=Accounts recei"able -== 3-= -=i"idends recei"able 1;= < 1;=:


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0onsolidation ad'ustents

1. r Share capital 1 2== ===r etained earnings 2:= ===r @oodwill 3;= ===

0r n"estent in winny Dtd 1 == ===

liination of the first acquisition.

2. r Share capital == ===r etained earnings 32= ===r Asset re"aluation reser"e = ===0r n"estent in winny Dtd 1 2== ===

liination of the second acquisition.

3. r i"idend incoe 1;= ===0r i"idend proposed 1;= ===

liination of inter&copany di"idend.

:. r i"idend payable 1;= ===0r i"idend recei"able 1;= ===

liination of inter&copany di"idend.

32. !ro 0actus Dtd’s indi"idual perspecti"e, a profit of ?3== === has been ade. he 'ournalentry in 0actus Dtd’s own 'ournal #and not in the consolidation 'ournal% would be

r 0ash 2 3== ===0r n"estent in 0astles Dtd 2 === ===0r 9rofit on sale of in"estent 3== ===

!ro the group’s perspecti"e, howe"er, the profit is not ?3== ===. o deterine the profitfro the group’s perspecti"e we need to consider post&acquisition o"eents in thereser"es of 0astles Dtd, and any goodwill that has been ipaired.

0ost of in"estent ?2 === ===9lus Share of post&acquisition o"eent inetained earnings #=.; E 3== ===% 1= ===Share of post&acquisition o"eent inAsset re"aluation reser"e #=.; E 3== ===% 1= ===

Dess @oodwill ipairent e)penses #2=>% to 3= Cune 2==$ #1;= ===%2 2== ===

Sale proceeds 2 3== ===@ain to econoic entity ? 1== ===

he consolidation ad'usting entries would be #at an aggregated le"el%

r 9rofit after ta) 2:= ===G

Solutions 5anual t6a Australian inancial Accounting -6e by 0raig eegan 328;


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r etained earnings ;= ===GG0r Asset re"aluation reser"e 1= ===GGG

G he ?2:= === reduction in consolidated profit after ta) is calculated as followsShare of subsidiary’s reported profit for the

2==$ financial year ?2== === ) =.; ?12= ===@oodwill aortisation recognised in 2==$ #?1;= ===%conoic entity’s profit on sale of subsidiary ?1== ===9arent entity’s profit on sale of subsidiary #?3== ===%eduction in consolidated profit ?2:= ===

GG he parent entity’s share of post&acquisition earnings to 3= Cune 2== is calculated asfollows

etained earnings of 0astles at 3= Cune 2==$ ?1 === ===9rofits for year ending 3= Cune 2==$ ?2== ===etained earnings of 0astles at 3= Cune 2== ?== ===

etained earnings at acquisition date #3= Cune 2==7% ?7== ===ncrease in retained earnings to 1 Culy 2== ?1== ===0actus Dtd’s share ?1== === ) =.;= ?;= ===

GGG Although we ha"e credited the asset re"aluation reser"e with the share of post&acquisition o"eents in the reser"e, what ust be considered is that the assets whichrelate to this reser"e were held in the subsidiary


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r @oodwill 2== ===0r n"estent in Sea Dtd 1 :== ===

Impairment of goodwill

Ie ha"e been told that the reco"erable aount of the purchased goodwill as at 3= Cune 2==$was ?;== ===. Ie are also told that all the ipairent in relation to purchased goodwill wasto be recognised in the 2==$ financial year.

@oodwill relating to first in"estent on 1 Culy 2==; ?-;= ===@oodwill relating to second in"estent on 1 Culy 2== ?2== ===otal purchased goodwill ?7;= ===eco"erable aount of goodwill as at 3= Cune 2==$ ?;== ===pairent to be recognised in 2==$ financial year ?1;= ===

here are no ta)ation iplications, as ipairent losses relating to goodwill are considereda peranent difference because they are not deductible for ta)ation purposes.

#c% ntry to recognise ipairent of goodwillr pairent loss & goodwill 1;= ===0r Accuulated ipairent losses & goodwill 1;= ===

Elimination of dividends

@i"en that Sea Dtd was 1== per cent owned by Angle Dtd, and hence there are no inorityinterests, all di"idends fro the subsidiary are to be eliinated.

#d% r i"idend payable #balance sheet% 1;= ===0r i"idend proposed 1;= ===

#e% r i"idend incoe 1;= ===0r i"idend recei"able #balance sheet% 1;= ===

he abo"e entries are posted to the consolidation wor+sheet as follows



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Consolidation wor,sheet for Angle -td and its controlled entity for the year ending 30 .une 200/

/liminations Angle )ea

1td 1td 2r 3r 3onsolidated $4%$4% $4% $4% $4%

Reconciliation of opening and closing retained earnings9rofit before ta) ;== -;= 1;=#c% :=

1;=#e%a) e)pense #3==% #2==% -==

9rofit after ta) 3== 3;= 3:=etained earnings & 3= Cune 2== 1 === == 2:=#a% 1 2:=

32=#b%1 3== 1 1;= 1 -=

i"idends proposed 1== 1;= 1;=#d% 1==.=

Balance sheet

)hareholders’ equity

etained earnings 1 2== 1 === 1 :=Share capital : === 2 === 1 2==#a% : =====#b%

e"aluation reser"e 2== =#b% 12=

3urrent liabilitiesAccounts payable 2== 2:= ::=i"idends payable 1== 1;= 1;=#d% 1==

5on-current liabilitiesDoans -== :== $==

; === : === 7 =:=

3urrent assets0ash 1== -== ;==

Accounts recei"able 3== ;== $==i"idends recei"able 1;= 8 1;=#e% 8n"entory 3:= :== 7:=

5on-current assetsDand 1 === 1 -== 2 -==9lant 7== 1 === 1 7==n"estent in Sea Dtd 3 :== 8 2 ===#a% 8

1 :==#b%@oodwill -;=#a% 7;=

2==#b%Accuulated ipairent losses & goodwill JJJJJ JJJJJ JJJJJ 1;=#c% #1;= %

; === : === 3 = 3 = 7 =:=

32.1= !ro Angle Dtd’s indi"idual perspecti"e, a profit of ?:== === has been ade, which is thedifference between the proceeds fro sale #?3 == ===% and the carrying "alue of thein"estent in the separate accounts of Angle Dtd #?3 :== ===%. Ie need to +now what profiton sale was included in the parent entity’s accounts as this will need to be re"ersed out. he

'ournal entry in Angle Dtd’s own 'ournal #and not the consolidation wor+sheet% on 1 Culy2==$ would be

r 0ash 3 == ===0r n"estent in Sea Dtd 3 :== ===0r 9rofit on sale of in"estent :== ===

Solutions 5anual t6a Australian inancial Accounting -6e by 0raig eegan 328$


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!ro the econoic entity’s perspecti"e, howe"er, the profit is not ?: == ===. o deterinethe profit fro the group’s perspecti"e, we need to consider the post&acquisition o"eentsin the reser"es of Sea Dtd and any goodwill that has been ipaired.

0ost of in"estent ?3 :== ===

plus#)hare of post-acquisition movement in retained earnings!irst acquisition #?1 === === inus ?:== ===% ) =.;= ?3;= ===Second acquisition #?1 === === inus ?== ===% ) =.:= ?= ===

)hare of post-acquisition movement in revaluation reserve!irst acquisition #?2== === inus ?=% ) =.;= ?12= ===Second acquisition #?2== === inus ?2== ===% ) =.3- =less# Accuulated goodwill ipairent losses to 3= Cune 2==$ #?1;= === %

?3 == ===Sale proceeds ?3 == ===

@ain to econoic entity fro sale of subsidiary ?nil

he consolidation ad'usting 'ournal entries in the 2=1= financial year would be

r 9rofit on sale of in"estent :== ===0r etained earnings 2= ===G0r e"aluation reser"e 12= ===

6 0 7 share of post-acquisition movements in retained profits to 8 une 9 less accumulated goodwill impairment losses 7 48+ plus 40 minus 4*+

he abo"e two entries to be ade in the 2=1= financial year will ensure that the openingretained earnings and re"aluation reser"e balances for the 2=1= financial year are the saeas the closing retained earnings in the 2==$ financial year. Although the abo"e entry hascredited the re"aluation reser"e with the share of post&acquisition o"eents in the reser"e#being ?12= ===%, what ust be considered is that the assets that relate to this reser"e wereheld in the subsidiary, which has been sold. An issue here is what to do with the reaining

balance in the re"aluation reser"e. AASB 11;, paragraph :1, pro"ides soe guidance in thisregard. t states

The revaluation reserve included in equity in respect of an item of property, plant

and equipment may be transferred directly to retained earnings when the asset isderecognised $that is, eliminated from the balance sheet%. This may involve

transferring the whole of the surplus when the asset is retired or disposed of.

(ence, in 2=1= we could put through a further consolidation wor+sheet 'ournal entry totransfer the re"aluation reser"e balance of ?12= === to retained earnings.

r e"aluation reser"e 12= ===0r etained earnings 12= ===

Solutions 5anual t6a Australian inancial Accounting -6e by 0raig eegan 3281=


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32.11 a1 eneral )ournal entry to record the sale of shares in "aish -td in $ac-tds accounts1

Calculation of the gain on sale of shares in "aish -td as recorded in the separate

accounts of $ac -td

9roceeds fro sale of shares in a"ish Dtd 7 === ===less 0arrying aount of shares in a"ish Dtd - ;== ===@ain on sale of shares in a"ish Dtd recorded by 5ac Dtd 1 :== ===

he 'ournal entry in the separate accounts of 5ac Dtd would ha"e been

r 0ash at ban+ 7 === ===0r @ain on sale of shares in a"ish Dtd 1 :== ===0r n"estent in a"ish Dtd - ;== ===

Ie need to +now the abo"e 'ournal entry so that in the consolidation wor+sheet we can

eliinate the profit recognised in the accounts of 5ac Dtd for the sale of shares in a"ishDtd.

b1 Consolidation wor,sheet )ournal entries

9rior to the sale of the subsidiary there could ha"e been an ipairent of purchasedgoodwill that needs to be accounted for separately. Ie are told that as at 31 eceber 2==the reco"erable aount of the goodwill was assessed to be ?31- ===. o deterine thee)tent of any ipairent we need to deterine the aount of goodwill initially purchased.his is calculated as follows

*eter(ination of goodwill ac5uired6 and related i(pair(ent cost for 200/

a"ish Dtd 5ac Dtd’s=> interest

? ? ?Share capital at acquisition date 3 -== === 2 == ===etained earnings at acquisition date 1 :== === 1 12= ===e"aluation reser"e

Balance per a"ish Dtd’s accounts at3= Cune 2==; 1 =-= ===!air "alue ad'ustent for land after ta)

#?: $== === & ?: 2== ===% ) #1 & =.3% :$= === 1 -:= === 1 232 ===

- 1-2 ===0ost of in"estent in a"ish Dtd - ;== ===9urchased goodwill :: ===eco"erable aount as at 31 eceber 2== 31- ===pairent e)pense to be recognised in year ending 3= Cune 2==$ 133 ===

he abo"e aount of ?133 === will need to be recognised separately fro any gain or losson the sale of the subsidiary.

Before we pro"ide the consolidation wor+sheet 'ournal entries we need to wor+ out the profit or loss on the sale of the subsidiary fro the econoic entity’s perspecti"e.



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ain or loss on the sale of "aish -td fro( the perspectie of the econo(ic entity

0ost of in"estent ?- ;== ===

plus#Share of post&acquisition o"eent in retained earnings to 3= Cune

2==, that is to the end of the preceding financial year #=. ) K2 ;;= === 8 1 :== ===L% ?1 == ===

Share of profits for the period during 2==$ for which a"ish Dtdwas a subsidiary F =. ) ?-=: === ) $612 #the subsidiary was controlled for nine onths of the year% ?3=2 :==

Share of di"idends paid fro 2==$ profits F =. ) ?1:= === #?112 ===%

Share of post&acquisition o"eent in asset re"aluation reser"e

F =. ) #2 1: === 8 1 -:= ===%, where ?1 -:= === reflects thead'usted balance of re"aluation reser"e at the date of acquisition ?-1- 2==

less# Accuulated goodwill ipairent losses to 31 5arch 2==$ #?133 ===%

?7 1= ;==

Sale proceeds ?7 === ===

Doss to econoic entity ?1= ;==

&eersal of gain on sale of shares in "aish -td as recorded in the separate accounts of$ac -td and recording loss on sale of shares in "aish -td fro( the groups perspectie

#a% r @ain on sale of shares in a"ish Dtd 1 :== ===r Doss on sale of shares in a"ish Dtd 1= ;==r pairent loss & goodwill #current year e)pense%133 ===r i"idend re"enue 112 ===0r etained earnings & 1 Culy 2== 1 == ===0r 9rofit after incoe ta) e)pense 3=2 :==0r e"aluation reser"e -1- 2==

A nuber of coents can be ade in relation to the abo"e 'ournal entry. Ie ha"e re"ersedout the profit on the sale of shares as recorded in the separate accounts of 5ac Dtd and weha"e included the forer subsidiary’s profit in the consolidated financial stateents for those nine onths in which it was controlled by 5ac Dtd. he entire profit for nine onthshas been included #it is not reduced to ta+e account of any inority interest%.

He)t we need to substitute the indi"idual re"enues and e)penses for the share of profit #?3=2:==% shown abo"e. Ie do this as the consolidated incoe stateent includes the respecti"e

balances of the indi"idual re"enue and e)pense accounts, sub'ect to ad'ustents for intragroup transactions. Although a"ish Dtd was only = per cent owned, we +now that wene"ertheless ha"e to include 1== per cent of the re"enues and e)penses for the period for which the subsidiary was controlled. his will necessitate the inclusion of a inorityinterest’s share in the profit of a"ish Dtd. @i"en that there were no intragroup transactions,



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the inority interest in the profit for the nine onths to 31 5arch 2==$ will equal ?-=: ===) =.2 ) $612 F ?7- ;==. he following consolidation 'ournal entry will ser"e

#b% r 9rofit after incoe ta) e)pense 3=2 :==r )penses #for first three quarters of

the year K-,32=,=== ) .7-L% 3 $$= ===r ncoe ta) e)pense #for first three quarters

of the year K33;,=== ) .7-L% 2-2 ===r 5inority interest in profit after incoe

ta) e)pense 7- ;==0r Sales re"enue #for first three quarters of

the year K;,1;=,=== ) .7-L% : ;2= ===

Ie are now in a position to transfer the abo"e consolidation wor+sheet 'ournal entries to theconsolidation wor+sheet. As we will see on the wor+sheet, there is no colun for a"ish Dtd. his

is because we only create a colun for those subsidiaries controlled at balance date. t would beinappropriate to include the assets, liabilities and equity accounts of organisations that were notcontrolled by a parent entity at balance date. As a result, there is also no inority interest in sharecapital or reser"es of the subsidiary. Ie ha"e included a debit to an account called /inority interestin profit after incoe ta) e)pense’. his is used because we ha"e included all of the incoe ande)penses of the subsidiary for the nine onths to 31 5arch 2==$, e"en though the parent only hadan = per cent interest. As can be seen in the following financial stateents, this ?7-,;== will beshown on the face of the incoe stateent, but has no corresponding position within the balancesheet.



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Consolidation wor,sheet as at 30 .une 200/

Eliminationsand adjustments

Consolidated Mac Ltd Dr Cr statements ($000) ($000) ($000) ($000)

Sales re"enue 17 2$= === #b%: ;2= === 21 $1= ===i"idend re"enue 112 === #a%112 === &@ain on sale of shares in a"ish Dtd 1 :== === #a%1 :== === &Doss on sale of shares in a"ish Dtd & #a%1= ;== #1= ;==%)penses 1- ::2 === #b%3 $$= === #1$ :32 ===%pairent loss goodwill & #a%133 === #133 ===%9rofit before incoe ta) 3 3;= === 2 1;: :==ncoe ta) e)pense 1 3:: === #b%2-2 === #1 -$; ===%G 9rofit after incoe ta) & #b%3=2 :== #a%3=2 :== .9rofit after incoe ta) 2 =1; === -; :==5inority interest in profit after ta) #b%7- ;== #7- ;==%9arent entity interest in profit after ta) :$2 ==etained earnings & 1 Culy 2== 3 =1= === #a%1 == === : =1 ===nteri di"idend #1 :7= ===% 1 :7= ===

etained earnings & 3= Cune 2==$ 3 --; === 3 =:= ==Share capital $ :-= === $ :-= ===e"aluation reser"e 2 $:= === #a%-1- 2== 3 :-- 2==otal shareholders’ equity 1- $:; === 1- $:; ===5ortgage loan 11 ;3: === 11 ;3: ===eferred ta) liability 1 $;= === 1 $;= ===otal equities 2$ -:= === 2$ -:= ===

0ash 7 2= === 7 2= ===Accounts recei"able 3 2$= === 3 2$= ===n"entory 2 73= === 2 73= ===Dand $ ;;= === $ ;;= ===Buildings 1$ 7:= === 1$ 7:= ===Accu. depreciation #13 1;= ===% JJJJJJJJ JJJJJJJJ #13 1;= ===%

otal assets : 22= === ; ::- ;== ; ::- ;== 2$ -:= ===

#c% 9reparation of consolidated balance sheet, consolidated incoe stateent, and a note to the consolidated financial stateentsreconciling opening and closing retained earnings

Consolidated inco(e state(ent of $ac -td and its subsidiaries

for the year ended 30 .une 200/

Sales 21 $1= ===Doss on sale of subsidiary #1= ;==%pairent loss&goodwill #133 ===%)penses #1$ :32 ===%9rofit before ta) 2 1;: :==ncoe ta) e)pense #1 -$; ===%

9rofit after incoe ta) e)pense -; :==9rofit after incoe ta) attributable to inority interest 7- ;==9rofit after incoe ta) attributable to parent entity interest :$2 ==

Solutions 5anual t6a Australian inancial Accounting -6e by 0raig eegan 3281:


15/15

Consolidated balance sheet of $ac -td and its subsidiary

as at 30 .une 200/

#arent

entity $inority

interest interest Consolidated

Current assets0ash 7 2= ===Accounts recei"able 3 2$= ===n"entory 2 73= ===

7on8current assets

Dand $ ;;= ===Buildings 1$ 7:= ===Accuulated depreciation #13 1;= ===%otal assets 2$ -:= ===

7on8current liabilities

5ortgage loan 11 ;3: ===eferred ta) liability 1 $;= ===

otal liabilities 13 -$: ===

9hareholders e5uity

etained earnings 3 =:= ==Share capital $ :-= ===e"aluation reser"e 3 :-- 2==otal shareholders’ equity 1- $:; ===otal equities 2$ -:= ===

7otes to and for(ing part of the consolidated accounts

7ote : &etained earningsetained earnings & 1 Culy 2== : =1 ===9rofit after incoe ta) attributable to 5ac Dtd :$2 ==nteri di"idend #1 :7= ===%etained earnings & 3= Cune 2==$ 3 =:= ==

Solutions 5anual t6a Australian inancial Accounting -6e by 0raig eegan 3281-

Deegan5e Sm Ch32

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Transcript of Deegan5e Sm Ch32