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Chapter 18

Example 18.2

Basil is an entity whose functional and presentational currency is the dollar ($).
On 1 January 20X7, Basil acquired 80% of the share capital of Manuel, an
entity whose functional currency is the euro (€).

Statement of profit or loss and other comprehensive income for the year
ended 31 December 20X8

Basil Manuel
$ €
Revenue 20,000 8,000
Operating expenses (8,000) (3,200)
–––––– –––––
Profit from operations 12,000 4,800
Finance costs (4,000) (1,200)
–––––– –––––
Profit before tax 8,000 3,600
Tax (2,400) (800)
–––––– –––––
Profit for the year 5,600 2,800
Other comprehensive income – –
–––––– –––––
Total comprehensive income 5,600 2,800
–––––– –––––
Exchanges rates have been as follows:

€: $1
1 January 20X7 5
31 December 20X7 3
31 December 20X8 2
Average for the year ended 31 December 20X8 2.5

It is Basil’s policy to measure NCI at fair value at the date of acquisition and the
fair value. Goodwill was calculated as €5,200 at acquisition. Goodwill had been
reviewed for impairment at 31 December 20X8 and it was determined that
goodwill should be impaired by €800. No impairment had been charged in
previous years.

st
The net assets of Manuel as at 31 December 20X8 were €23,200.
Required:

Prepare the consolidated statement of profit or loss and other
comprehensive income of the Basil group for the year ended 31 December
20X8.

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