Q1.

ABC Comoany acquired 80% shares of XYZ limited on Jan 1 2021. Their statements of Financial
Position at 31 Dec 2022 are as under:
ABC XYZ
PPE 486,000 445,000
Investments 870,000 465,000
Account Receivable 45,000 60,750
Interest Receivable 65,000 87,750
Dividend receivable 120,000 162,000
Cash 210,000 228,000
Total Asset 1,796,000 1,448,500

Share Capital 500,000 200,000

Retained Earnings 900,000 648,500
Loan Payable 150,000 300,000
Interest Payable 100,000 80,000
Dividend Payable 128,000 150,000
Account Payable 18,000 70,000
Total Equity and Liabilities 1,796,000 1,448,500

XYZ retained earnings at the time of acquisition is RS. 150,000

Account Receivable in ABC limited includes Rs. 24,800 whereas the same was
appearing in XYZ books at Rs. 16,400

All interest income earned by parent from XYZ

XYZ has not paid the dividend it recently has announced

Investment of ABC include Rs. 360,000 given as Loan to XYZ.

Required:
Consolidated SOFP
Q2.
ABC acquired 70% shares of XYZ in July 2020 when the retained earning of the company stood at
Rs. 300,000. Their statement of financial position as at 31 December 2023 are as under

ABC XYZ
Intangibles 800,000 150,000
Investments 692,000 10,000
PPE 1,450,000 720,000
Stock 400,000 128,750
Receivables 125,000 191,250
Total Asset 3,467,000 1,200,000

Share Capital 1,200,000 300,000

Retained Earnings 1,764,550 775,000
Liabilities 502,450 125,000
Total Equity and Liabilities 3,467,000 1,200,000

Other Information
Intangibles of XYZ are as follows
Carrying Amount FV at the Acq
Asset At Acq At RD
Goodwill 35,000 25,000 Nil
Software 126,000 63,000 168,000
Others 70,000 62,000 70,000

Note 1
Goodwill in the books of subsidiary is booked when the XYZ limited acquired a sole trading
business. The goodwill was present on the books when ABC acquired XYZ in 2020, however it was
impaired by Rs.10,000 subsequently

Note 2

The Fair value of XYZ software was Rs 168,000 and it had a remaining life of 7 years at the date
of acqusition. No software was acquired or disposed of since the acqusition by ABC limited

Note3
The fairvalue of remaining intangibles was equal to their carrying amounts.

At the date of acqusition all the assets of XYZ had a carrying amount equal to its fair value with
the exception of the following:
FV Excess over Useful Life at
CA Acq
Equipment 100,000 5 years
Land 70,000 indefinite

At the date of acquisition XYZ has a customer list which it has developed over
years. It is not recognised as intangible asset becuase IAS 38 places restrictions
over the recognition of internally generated intangibles.
The directors of the company however are of the view that the said list has a
fair value of Rs. 48,000 and has an estimated useful life of 10 years. The
directors wishes to book this as a seprate asset on the consolidated SOFP

Required:
Consolidated SOFP