June 2009 P2 Q 1 (official examiner version)

Working
1)Fair value of identifiable net assets ($ m)
Others 400
Less : Share capital (220) Dr Land 40
Retained earnings (136) Cr FV adj 40
Other component of equity (4)
increase in the value of non-depreciable land 40
Goodwill calculation - Message Total
$m
Consideration transferred 300
NCI at fair value 86
386
Share of net assets at fair value (400)
Bargain purchase (14)
Bargain purchase of $14m is recognised to consolidated statement of profit or loss
2)Fair value of identifiable net assets ($ m)
Others 176
Less : Share capital (100) Dr PPE 14
Retained earnings (55) Cr FV adj 14
Other component of equity (7) Dr RE (Mixted) 2
increase in the value of PPE 14 Cr PPE 2
Dr RE (Mixted) 0.6
Cr DTL 0.6
Goodwill calculation - Mixted Total
$m
Consideration transferred
6% 10
6% - gain on remeasurement 5 Dr Inv in mixted 5
64% 118 Cr RE (B) 5
Contingent consideration 12
Dr Inv in mixted 12
NCI at fair value 53 Cr Cont liab 12
198
Share of net assets at fair value (176) Dr FV adj 3
Deferred tax (176-166)x30% 3 Cr DT 3
Goodwill 25
3) Investment in associate as at 31 May 2009
$m
Cost of investment (9+11) 20 Dr Inv in clarity 2.5
Share of post acquisition profit (10 x 25%) 2.5 Cr RE (B) 2.5
22.5 Dr AFS R 1
Note : $1m of AFS reserve reclassified to consolidated SPL and to Group RE Cr RE (B) 1
4) AFS investment
Date Exchange rate Changes in fair value
Dinar $
01-Jun-07 4.5 11.0 49.5
31-May-08 5.1 10.0 51.0 1.5 AFS reserves
31-May-09 4.8 7.0 33.6 (17.4)
Dr AFS reserves 1.5
Dr Impairment loss 15.9
Cr AFS investment 17.4
5) Inventories
Selling price of units 1,450
Less selling costs (10)
NRV at finished products 1,440
Less conversion costs (500)
NRV at 1st stage 940
Write down
200,000 units x (1,500 1,440) 12 Dr RE (B) 18
100,000 units x (1,000 940) 6 Cr Inventory 18
18
6) Reclassification of loan to director
Dr Loan to director 1
Cr Cash and cash equivalent 1
Value
7) Group retained earning
$m
Bravado 240.0
Adjustments :-
Bargain purchase realised (W1) 14.0
Gain on remeasurement (W2) 5.0
Associate profit (W3) 2.5
AFS reserves realised (W3) 1.0
AFS impairment (W4) (15.9)
Inventory write down (W5) (18.0)
228.6
Message ($150m-$136m) x 80% 11.2
Mixted ($80m-$55m -2+0.6) x 70% 16.5
256.3
8) Non controlling interest
Message $m
FV at date of acquistion 86.0
Post acq reserves ($150m-$136m) x 20% 2.8
Mixted
FV at date of acquistion 53.0
Post acq reserves ($80m-$55m -2+0.6) x 70% 7.1
148.9
Bravado Group - Consolidated Statement of Financial Position as at 31st May 2009
$m
Non current assets (265+230+161+40 w1+14 -2 w2) 708.0
Goodwill 25.0
Investment in associate 22.5
AFS investment (51+6+5-17.4 w4) 44.6
800.1
Current assets
Inventories (135+55+73-18 w5) 245.0
Trade receivables (91+45+32) 168.0
Loan to directors w6 1.0
Cash and cash equivalents (102+100+8-1 w6) 209.0
1,423.1
Share capital 520.0
Retained earnings (W7) 256.3
Other components of equity (12-1-1.5 w4) 9.5
785.8
Non controlling interest (W8) 148.9
Total equity 934.7
Non current liabilities
Long term borrowing (120+15+5) 140.0
Deferred tax (25+9+3+3-0.6 w2) 39.4
Current liabilities
Trade and other payable (115+30+60+12 w2) 217.0
Current tax payable (60+8+24) 92.0
2,357.8