Page 293 - Microsoft Word - 00 CIMA F1 Prelims STUDENT 2018.docx
P. 293
Changes in group structure
Example 15.1
Ziggy acquired 35% of Stardust on 31 December 20X1 for $67,500. At this time
the reserves of Stardust were $57,000. Stardust had 75,000 $1 equity shares in
issue.
A further 25% of shares in Stardust were acquired by Ziggy on 31 December
20X4 for $52,500. At this date, the fair value of the existing holding in Stardust
was $79,000 and Stardust’s reserves were $75,000.
On the 31st December 20X8, the retained earnings of Ziggy and Stardust were
$187,500 and $91,500 respectively.
The book value of Stardust's net assets was deemed to be equal to fair value. It
is group policy to measure non-controlling interests at the proportion of net
assets at the date of acquisition.
Required:
Prepare the calculations required for:
(i) goodwill
(ii) group retained earnings,
to be included within the consolidated statement of financial position of
Ziggy group for the year ended 31st December 20X6.
285
