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CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS

Revision example 2

5. On 1 January 2016 a long-term loan of R80 000 was made by Auto
Ltd to Mobile Ltd and it was repayable in full on 1 January 2020.

Interest was calculated at 14% per annum and had been paid to Auto
Ltd for the current year.

6. Mobile Ltd purchased a machine from Auto Ltd for R140 000 on 1
July 2016. The carrying amount of the machine on 1 July 2016 was
R100 000. The machine was originally purchased by Auto Ltd on 1

July 2013 for R250 000. Both companies depreciate machinery over
the useful life of five years using the straight-line method, which is in
line with the tax allowance used by the South African Revenue
Service. The expected useful life of the machine remained

unchanged.

7. In all companies, each share carries one vote.

8. The fair value of the equity investment is equal to the cost price
thereof, unless otherwise stated. The equity investment is measured

at fair value through other comprehensive income (FVTOCI).

9. At the end of the current year goodwill was assessed for
impairment and it was found that goodwill had not been impaired.

The group uses the partial goodwill method to recognise goodwill.
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