SOLUTION TEST 2 (SEMESTER JUNE 2019) -(ALL FIGURES STATED IN RM MILLION)
ASSO – SUBS (NCI measured at fair value)
Parent Sub DOA H NCI Cost Fair value
Bella Pudore 1/4/15 OS 30% Associate 12m RM2.00 per share
1/7/18 OS 30% 15m RM2.50 per share
Total 60% 40%
Bella Osra 1/1/18 OS 60% 40% RM1.50 per share
a. Goodwill on acquisition on Pudore Bhd [W1] (60%)
RM’ Million
Consideration Transferred (second purchased) 15.00
Fair value of previously acquired interest 30% x 20 x RM2.50 15.00
(+) NCI 40% x 20 x RM2.50 20.00
50.00
(-) FVNA 1/7/2018
OSC 20.00
Retained profit at 1/7/2018
-Retained profit b/f 13.3
-Profit for the year (17.2 x 6/12) =8.6 21.90 41.90
Goodwill 8.10
Impairment (5% x 8.1) (0.41)
Goodwill 7.70
b. Gain or loss on disposal of associate (30%) (W2)
RM’ RM’
Million Million
Proceeds (FV of investment at 1/7/2018) - from (a) 15.00
(-) Carrying amount of Associate at 1/7/2018
Cost of investment 12.00
(+) Share of post-acquisition profit
(1/4/2015-1/7/2018)
Retained profit (1/4/2018-1/1/2018)
13.3 – 12.6 = 0.7
Profit for the year (1/1/2018 – 1/7/2018)
17.2 x 6/12 =8.6 9.3 x 30% 2.79
(-) Impairment of associate (RM100K) (0.10) (14.69)
Gain on disposal of associate 0.31
1
c. Goodwill on acquisition of Osra Bhd (60%) (W3)
RM’ Million
Consideration Transferred 60% x 13m x RM1.50 11.70
(+) NCI 40% x 13m x RM1.50 7.80
19.50
(-) FVNA AT DOA 1.1.2018
OSC 13.00
RE 2.10
ARR Land 2.00
ARR Equipment (10 – 6) 4.00 (21.10)
Bargain Purchase (1.60)
d. Consolidated Statement of Profit or Loss Account and Other Comprehensive
Income of Bella Bhd for the year ended 30 June 2018
RM’Million
Revenues (194+30) + 42(84 x 6/12) - 5 intra-sales 261.00
(-) Cost of Sales
Opening inventory (20 + 6.4) + 5.8(11.6x6/12) 32.20
(+) Purchases (80 + 10.6) + 20(40x6/12) -5 intra-purchase 105.60
(-) Closing inventory (30 + 4) + 9(18x6/12) - 0.24 (1.2x20% urp (42.76)
closing)
(95.04)
Gross Profit 165.96
Gain on disposal of assets (5 + 0.2) – 0.2(intra) - 4.5([28.5 – 24]) (intra) 0.50
Income for investment 3 – 0.24(0.4x60%) – 0.06 (0.1 x 60%) 2.70
Bargain purchase W3 1.60
Goodwill impairment W1 current year (0.41)
Gain on disposal of associate W2 ‘virtual sale’ 0.31
Share of profits in Pudore Bhd 17.2 x 6/12 x 30% 2.58
Underprov deprec (equipment) 4 x20% (0.80)
Overprov Deprec (machine) 0.04 (0.2 x 20%) + 1.5 ([28.5 – 24]/3y) 1.54
Operating Expenses (16.8 + 5.9) + 12.65(25.3x6/12) (35.35)
Profits Before Taxes 138.64
Taxation (11.806 + 2.824) + 3.95(7.9x6/12) (18.58)
Profit After Tax 120.06
Other Comprehensive income
Revaluation reserve 1.00
Total comprehensive income 121.06
PROFIT AFTER TAX ATTRIBUTABLE TO:
Owner Equity of Parent (balancing figure) 113.29
Non-Controlling Interest (W4) Pudore 3.76
Osra 3.01 6.76
120.06
2
TCI ATTRIBUTABLE TO:
Owner Equity of Parent (balancing figure) 113.89
Non-Controlling Interest Pudore 3.76 (as above)
Osra 3.01 (as above) + (1 ARR X 0.4) = 3.41 7.16
121.06
W4 PAT to NCI:
Pudore Bhd (40%)
PAT (17.2 X 6/12) 8.60
- Pref Share dividend (0.80) 100% (0.80)
- Impairment of full GW (0.41)
Adjusted PAT 7.39
NCI % 40% 2.96
3.76
Osra Bhd (40%)
PAT 8.48
- Under Dep Equipment (4x20%) (0.80)
- URP on sale of machine (0.20)
+ Over dep Equipment (0.2 x 20%) 0.04
Adjusted PAT 7.52
NCI % 40% 3.01
PAT to NCI 6.76
e. Consolidated Statement of Changes in Equity of Bella Bhd group for the year ended
31 December 2018 (showing RE and NCI only)
Group Non- Controlling
Retained Earnings Interest
RM Million RM Million
Balance 1 Jan 2018 (W5) 77.51 -
Profits for the year 113.29 6.76
NCI in Sub acquired during the year (W6) 35.80
20 (a) + 7.8 (c) + 8 (PS)
Revaluation during the year 0.40
Dividend-ordinary shares (2.8) (0.20)
(0.4 x40%) + (0.1x40%)
Dividend-preference shares - 100% (0.80)
Balance 31 December 2018 188.00 41.96
3
W5 GRE as 1 Jan 2018
Group RE
Bella Bhd
Retained profit 1/1/2018 77.40
Pudore Bhd – Share of profit from associate (Previous years)
(13.3 – 12.6) X 30% - 0.10 (impairment) 0.11
77.51
W6 – Acquisition during the year
Pudore 40% RM’million RM’million
NCI on Acquisition date (OS) 20
Osra 40%
NCI on Acquisition date (OS + PS) (7.8 + 8) 15.8
35.8
(Total: 50 Marks)
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Note: ASSO to SUB (example 3 Chapter 16)
Step 1: Gain or loss on associate and repurchased (40%)
RM
Proceeds (Fair value on 1 Jan x5) 90,000
Carrying amount:
Cost 67,000
(+) Post-acquisition RP (100’ – 45’) 55,000
X 40% 22,000
Carrying amount 89,000
Gain on ‘virtual sale’ to CSOPLCI 1,000
Step 2 : Goodwill in Subs (70%) – NCI at proportionate of FVNA
CT 80,000
Fair value of previous interest 90,000
NCI = 30% x 200,000 60,000
230,000
Less: FVNA of S on 1/1/x5:
OS 100,000
RP 100,000 (200,000)
Goodwill to CSOFP 30,000
