Page 445 - Microsoft Word - 00 CIMA F1 Prelims STUDENT 2018.docx

Answers

Example 18.1 cont'd

Fair value method used for impairment. Impairment split 80% to Parent
($320 × 80% = 256 (W5)) and 20% to NCI ($320 × 20% = 64 (W4)).

(W4) Non-controlling interests
$
NCI at acquisition @ HR (3,600/5) 720
NCI% × post acquisition reserves (20% × 8,560 (W2)) 1,712
NCI% impairment (20% x 320) (64)
NCI% exchange gain on goodwill (20% × 1,480) 296
–––––
2,664
(W5) Reserves

$
100% parents - Basil 16,000
P% of S’s post-acquisition (80% × 8,560 (W2)) 6,848
Impairment (80% × 320) (256)
Exchange gain on goodwill (80% × (1,480) (W3)) 1,184
–––––
23,776
–––––
(W6) Translation of Manuel SOFP

€ Closing rate $
Non-current assets 20,000 2 10,000
Current assets 12,000 2 6,000
––––––
16,000
––––––
Equity Historic rate
Share capital 12,000 5 2,400
Reserves – pre-acq 3,200 5 640
Reserves - post acq β 8,560β
––––––
11,600
Closing rate
Current liabilities 8,800 2 4,400
––––––
16,000
––––––

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