PQ test bank
So what do you know? Professor Philip E Dunn tests your knowledge of Consolidated Financial Statements Q1. Which International Financial Reporting Standard deals with a Business Combination? Q2. Which International Financial Reporting Standard deals with Consolidated Financial Statements? Q3. Positive Goodwill is capitalised but is then subject to what on an annual basis? Mini case study Dunn Ltd acquired 7.5m shares in Davenport Ltd at a cost of £30m on 1 January 2020 and the summary Statements of Financial Position of the companies immediately after the acquisition were: Dunn Ltd Non-Current Assets Investment in Davenport Current Assets Total Assets
£m 60.00 30.00 20.00 ------£110.00
Equity Share Capital Retained Earnings Total Equity Current Liabilities Total Equity and Liabilities Davenport Ltd Non Current Assets Current Assets Total Assets Equity Share Capital 10m Ordinary Shares £1.00 each Retained Earnings Total Equity Current Liabilities Total Equity and Liabilities
30.00 70.00 100.00 10.00 ------£110.00 ------£m 25.00 15.00 ------£40.00
10.00 23.00 33.00 7.00 ------£40.00
Q4. Calculate the amount of Goodwill arising on the acquisition. Q5. Calculate the Non-Controlling Interest. When drafting the Consolidated Statement of Financial Position immediately after the acquisition what would be the values for the following? Q6. Non-Current Assets. Q7. Goodwill. Q8. Current assets. Q9. Total assets. Q10. Share capital. Q11. Retained earnings. Q12. Non-Controlling Interest. Q13. Total equity. Q14. Current liabilities. Q15. Total equity and liabilities. Q16. In future years the Goodwill will be subject to Impairment under which International Financial Reporting Standard?
Answers Q1. IFRS 3 Business Combinations, Q2. IFRS 10 Consolidated Financial Statements, Q3. Impairment, Q4. £5.25m, Q5. £8.25m, Q6. £85m, Q7. £5.25m, Q8. £35m, Q9. £125.25m, Q10. £30m, Q11. £70m, Q12. £8.25m, Q13. £108.25m, Q14. £17m, Q15. £125.25, Q16. IAS 36 Impairment of Assets. 38
PQ Magazine March 2022
