answer to question six summarised

Question

Answer to Question Six

		Summarised consolidated statement of comprehensive income for the A group for the year ended 30 September 2010 All workings in A$000				Total A$000
		Revenue (4,600 +3,385(W1))				7,985
		Costs and expenses (3,700+2,462(W1))				(6,162)
		Share of associate's profit (W3)				160
		Profit before tax				1,983
		Income tax expense (200+231(W1))				(431)
		Profit for the year				1,552
		Other comprehensive income
		Revaluation gains net of tax (200+185(W1))				385
		Share of associate's OCI (W3)				28
		FOREX gain in year (W4)				803
		Total OCI				1,216
		Total comprehensive income				2,768
		PFY attributable to:
		Equity holders of the parent				1,414
		Non-controlling interest (W5)				138
		1,552
		TCI attributable to:
		Equity holders of the parent				2,432
		Non-controlling interest (W5)				336
		2,768
	Consolidated statement of financial position for the A group as at 30 September 2010 (all workings in A$000)						A$000
	Assets
	Non-current assets
	Property, plant and equipment (7,000 + 6,349 (W1))						13,349
	Goodwill (W2)						635
	Investment in associate (W6)						1,220
	15,204
	Current assets (3,000 + 3,175 (W1))						6,175
	Total assets						21,379
	Equity and liabilities
	Equity attributable to the parent
	Share capital						2,000
	Retained reserves (W8)						13,522
	15,522
	Non-controlling interest (W7)						1,476
	Total equity						16,998
	Current liabilities (2,000 + 2,381(W1))						4,381
	Total equity and liabilities						21,379
Workings Financial Management May 2011 7 W1 Translation of B			B$000		Rate				A$000
Statement of comprehensive income					@ avge rate
Revenue			2,200		A$/B$0.65				3,385
Cost of sales and expenses			(1,600)		A$/B$0.65				(2,462)
Profit before tax				600				923
Income tax			(150)		A$/B$0.65				(231)
Profit for year				450				692
Other comprehensive income:
Revaluation gains on PPE			120		A$/B$0.65				185
Total OCI				120				185
Total comprehensive income				570				877
Statement of financial position
Non-current assets
Property, plant and equipment			4,000		@CR B$0.63				6,349
Current assets			2,000		@CR B$0.63				3,175
6,000					9,524
Equity and liabilities
Share capital			1,000		@HR B$0.50				2,000
Pre-acquisition reserves			1,800		@HR B$0.50				3,600
Post-acquisition reserves			1,700		Bal fig				1,543
Total equity				4,500				7,143
Current liabilities			1,500		@CR B$0.63				2,381
6,000					9,524

 

						W2 Goodwill		B$000									Rate				A$000
						Consideration transferred		2,600									A$/B$0.50				5,200
						NCI @ FV		600									A$/B$0.50				1,200
						NA acquired:
						Share capital		(1,000)									A$/B$0.50				(2,000)
						Retained earnings		(1,800)									A$/B$0.50				(3,600)
						Goodwill at 1 October 2007				400										800
						FOREX loss (balancing figure)											(237)
						Goodwill at 30 September 2009		400									A$/B$0.71				563
						FOREX gain (balancing figure)											72
						Goodwill at 30 September 2010		400									A$/B$0.63				635
					W3 Share of associate's profit/OCI											A$000
					Share of associate's PFY (40% x A$400,000)											160
					Share of associate's other comprehensive income (40% x A$70,000)											28
				W4 FOREX gains/losses in the year											A$000
				Closing net assets @ CR (B$4,500,000/0.63) or from W1											7,143
				Less opening net assets @ OR ((B$4,500,000 less TCI B$570,000)/0.71)											(5,535)
				Less TCI for year @ average rate (B$570,000/0.65)											(877)
				FOREX gain on translation of subsidiary's net assets											731
				Plus FOREX gain on translation of goodwill											72
				Total FOREX gains on translation of subsidiary											803
			W5 NCI share of PFY/TCI in year						PFY										TCI
			A$000											A$000
			Subsidiary's PFY/TCI (W1)						692										877
			20% share						138										175
			FOREX gain on translation of subsidiary (20% x A$803,000)						___										161
			138											336
		W6 Investment in associate											A$000
		Investment at cost											900
		Plus share of post-acquisition reserves 40% x (A$1,500,000 - A$700,000)											320
		1,220
	W7 Non-controlling interest											A$000
	NCI on acquisition (W2)											1,200
	NCI share of post-acquisition reserves of subsidiary (20%xA$1,543,000(W1))											309
	NCI share of net FOREX losses on translation of goodwill (20% x A$(237,000-72,000))											(33)
	NCI at 30 September 2010											1,476
W8 Reserves							A											B
A$000											A$000
As per SOFP							12,100											5,143
Less pre-acquisition reserves (W1)											(3,600)
1,543
Group share 80% x A$1,543,000											1,234
Group share of associate's post-acquisition reserves (W6)											320
Group share of net FOREX losses on translation of goodwill (80% x A$(237,000-72,000))											(132)
Group reserves											13,522