TASK 2:

The statement of financial position of Grandpa Bhd and Grandma Bhd as at December 31, 2015 were as follows:-

Grandpa Bhd        Grandma Bhd

RM’000                       RM’000

Property Plant & Equipment                                                      9,000                           5,000

Investment in Mama Plc                                                             5,000

Other Assets

2,000


1,500


16,000


6,500

Share Capital                                                                                  500                              500

Retained Earnings                                                                    14,500                               5,000

Other Liabilities

1,000


1,000


16,000


6,500

Grandpa Bhd acquired 80% equity in Grandma Bhd two years ago.

At the date of acquisition, Grandma’s retained earnings stood at RM3miliion and the fair value of its net assets was RM5million. This was RM1.5million above the carrying amount of the net assets at this date. The fair value adjustment related to an asset that had a remaining useful economic life of 10 years as at the date of acquisition. The goodwill arising on consolidation has not suffered any impairment.

Required:

Prepare the consolidated statement of financial position of Grandpa Bhd Group as at December 31, 2015, on the assumption that non-controlling interest is valued at fair value (use the full goodwill method).

Please show all workings