The statements of financial position of M Ltd, P Ltd and Q Ltd as at 31 July 2018 are as follows:
The following information is available:
(a) On 31 July 2015, M Ltd paid £410,000 to acquire 90% of the share capital of P Ltd. The retained earnings of P Ltd on that date were £220,000. The company’s issued share capital has not changed since M Ltd acquired its holding. On 31 July 2015, the fair value of the non-current assets of P Ltd was £80,000 higher than their book value. This valuation has not been reflected in the books of P Ltd.
(b) On 31 July 2017, M Ltd paid £100,000 to acquire 25% of the share capital of Q Ltd. The retained earnings of Q Ltd on that date were £240,000 and all of its assets and liabilities were carried at fair value. The company’s issued share capital has not changed since M Ltd acquired its holding.
(c) There have been no impairment losses.
(d) Non-controlling interests in subsidiaries are to be measured at the appropriate proportion of the subsidiary’s identifiable net assets.
(e) Any depreciation consequences of the fair value adjustment relating to the non current assets of P Ltd may be ignored.
Required:
Prepare a consolidated statement of financial position for M Ltd as at 31 July 2018.
