Question

Share Capital of P Ltd is 400,000 ordinary shares.
Share Capital of E Ltd is 100,000 ordinary shares.
Share Capital of F Ltd is 100,000 ordinary shares
Share Capital of G Ltd is 100,000 ordinary shares
P Ltd acquired its 100% interest in E Ltd for cash consideration of $100,000 in January 20X1 and E Ltd share capital is $100,000.
P Ltd acquired its 100% interest in F Ltd for cash consideration of $230,000 in February 20X2 when F Ltd's net assets at fair value were represented by share capital of $100,000 and retained profit of $130,000.
P Ltd acquired its 100% interest in G Ltd for cash consideration of $250,000 in March 20X5 when G Ltd's net assets at fair value were represented by share capital of $100,000 and retained profit of $100,000.
There has been no goodwill impairment.
On 1 January 20X8, P Ltd sold (i) all its shareholding in E Ltd for cash consideration of $450,000,
  (ii) 90,000 of F Ltd's shares for cash consideration of $400,000, and
  (iii) 40,000 of G Ltd' shares for cash consideration of $120,000.
The fair value of the remaining 10,000 shares in F Ltd (accounted as FVOCI investments is $35,000 and $38,000 on 1 January and 31 December 20x8 respectively).

(a) Statement of financial position as at 31 December 20X8

P Ltd E Ltd F Ltd G Ltd
$'000 $'000 $'000 $'000
Investment in AFS, at fair value 10,000 shares in F Ltd 38 - - -
Investment in subsidiary, at cost 60,000 shares in G Ltd 150 - - -
Other assets 1,010 800 700 600
  1,198 800 700 600
Share capital 400 100 100 100
Fair value reserve 15 - - -
Retained profits 550 420 280 190
Liabilities 233 280 320 310
1,198 800 700 600
Do the consolidation financial position and statement of profit or loss with CJE for 20x8.

Answer 1

(a) Statement of financial position as at 31 December 20X8
	Particulars	$
	ASSETS
	Investment in F Ltd	$                   38,000,000,000
	Investment in G Ltd (Note c)	$                 150,000,000,000
	Other Assets	$              1,010,800,700,600
	Total Assets	$              1,198,800,700,600
	SHAREHOLDER'S EQUITY & LIABILITIES
	Share Capital	$                 400,100,100,100
	Fair Value Reserve (Note d)	$                   15,000,000,000
	Retained Profits	$                 550,420,280,190
	Liabilities	$                 233,280,320,310
	Total Shareholder's equity & liabilities	$              1,198,800,700,600
(b) Statement of profit and losss for 31 December 20X8
	Particulars	$
(i)	Sales value of shares in E Ltd	$                 450,000,000,000
	Less Purchase Value of shares in E Ltd	$                 100,000,000,000
	Profit on sale	$                 350,000,000,000
(ii)	Sales value of shares in F Ltd (90000 Shares)	$                 400,000,000,000
	Less Purchase Value of shares in E Ltd	$                 207,000,000,000
	Profit on sale	$                 193,000,000,000
(ii)	Sales value of shares in G Ltd (40000 Shares)	$                 120,000,000,000
	Less Purchase Value of shares in E Ltd	$                 150,000,000,000
	Loss on sale	$                 (30,000,000,000)
	Total Profit/(Loss) on sale investments	$                513,000,000,000
(c)	Calculation of Investment in G Ltd:
	Cost of 100000 shares	$                 250,000,000,000
	Propotionate cost of 60000 shares	$                150,000,000,000
(d)	Calculation of fair value reserve:
	Fair value of shares in F Ltd (10000 Shares)	$                   38,000,000,000
	Cost of shares in F Ltd (10000 Shares)	$                   23,000,000,000
	Fair value Reserve balance	$                   15,000,000,000