Question
Ashbourne plc acquired 80% of Brackley Ltd a year ago. Calculate goodwill, the unrealised profit on intragroup inventory, group retained earnings and the NCI, then prepare the consolidated statement of financial position.
Statements in this challenge
- GoodwillNumeric Answer
- Unrealised ProfitNumeric Answer
- Group Retained EarningsNumeric Answer
- Non-controlling InterestNumeric Answer
- Consolidated StatementBalance Sheet
Scoring
- 40% Account naming / line matching
- 40% Amount correctness
- 20% Structure / section placement
IFRS 9 — Financial Instruments
Classification drives the accounting, so settle it first: amortised cost, fair value through profit or loss, or fair value through other comprehensive income. Only then decide where remeasurement gains and losses land, because the same price movement is reported in different places under different classifications.
Common mistakes
- Routing a fair value movement through profit or loss when the instrument is measured at FVOCI, or the reverse.
- Capitalising transaction costs on an instrument held at fair value through profit or loss, where they are expensed.
- Forgetting to remove the cumulative gain or loss from equity on the disposal of an FVOCI investment.
Further readingIFRS 9: measuring financial instruments