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ACCA P2 一日一练

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更多 发布于:2011-12-13 11:05
    Grange, a public limited company, operates in the manufacturing sector. The draft statements of fi nancial position of
      the group companies are as follows at 30 November 2009:

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      The following information is relevant to the preparation of the group fi nancial statements:

       (i)  On 1 June 2008, Grange acquired 60% of the equity interests of Park, a public limited company. The purchase
           consideration comprised cash of $250 million. Excluding the franchise referred to below, the fair value of the
           identifi able net assets was $360 million. The excess of the fair value of the net assets is due to an increase in the
           value of non-depreciable land.

           Park held a franchise right, which at 1 June 2008 had a fair value of $10 million. This had not been recognised
           in the fi nancial statements of Park. The franchise agreement had a remaining term of fi ve years to run at that date
           and is not renewable. Park still holds this franchise at the year-end.

           Grange wishes to use the ‘full goodwill’ method for all acquisitions. The fair value of the non-controlling interest in
            Park was $150 million on 1 June 2008. The retained earnings of Park were $115 million and other components
           of equity were $10 million at the date of acquisition.

           Grange acquired a further 20% interest from the non-controlling interests in Park on 30 November 2009 for a
           cash consideration of $90 million.

       (ii) On   31   July   2008,   Grange   acquired   a   100%   of   the   equity   interests   of   Fence   for   a   cash   consideration   of
           $214 million. The identifi able net assets of Fence had a provisional fair value of $202 million, including any
           contingent liabilities. At the time of the business combination, Fence had a contingent liability with a fair value
           of $30 million. At 30 November 2009, the contingent liability met the recognition criteria of IAS 37 ‘Provisions,
           Contingent   Liabilities   and   Contingent   Assets’   and   the   revised   estimate   of   this   liability   was   $25   million.   The
           accountant of Fence is yet to account for this revised liability.

     However, Grange had not completed the valuation of an element of property, plant and equipment of Fence at
      31 July 2008 and the valuation was not completed by 30 November 2008. The valuation was received on
      30 June 2009 and the excess of the fair value over book value at the date of acquisition was estimated at
      $4 million. The asset had a useful economic life of 10 years at 31 July 2008.

      The retained earnings of Fence were $73 million and other components of equity were $9 million at 31 July 2008
      before any adjustment for the contingent liability.

      On 30 November 2009, Grange disposed of 25% of its equity interest in Fence to the non-controlling interest
      for a consideration of $80 million. The disposal proceeds had been credited to the cost of the investment in the
      statement of fi nancial position.

 (iii)  On 30 June 2008, Grange had acquired a 100% interest in Sitin, a public limited company, for a cash consideration
      of $39 million. Sitin’s identifi able net assets were fair valued at $32 million.

      On 30 November 2009, Grange disposed of 60% of the equity of Sitin when its identifi able net assets were
      $36 million. Of the increase in net assets, $3 million had been reported in profi t or loss and $1 million had been
      reported in comprehensive income as profi t on an available-for-sale asset. The sale proceeds were $23 million
      and the remaining equity interest was fair valued at $13 million. Grange could still exert signifi cant infl uence after
      the disposal of the interest. The only accounting entry made in Grange’s fi nancial statements was to increase cash
      and reduce the cost of the investment in Sitin.

 (iv)  Grange acquired a plot of land on 1 December 2008 in an area where the land is expected to rise signifi cantly in
      value if plans for regeneration go ahead in the area. The land is currently held at cost of $6 million in property,
      plant and equipment until Grange decides what should be done with the land. The market value of the land at
      30 November 2009 was $8 million but as at 15 December 2009, this had reduced to $7 million as there was
      some uncertainty surrounding the viability of the regeneration plan.

(v)    Grange anticipates that it will be fi ned $1 million by the local regulator for environmental pollution. It also anticipates
      that it will have to pay compensation to local residents of $6 million although this is only the best estimate of that
      liability. In addition, the regulator has requested that certain changes be made to the manufacturing process in
      order to make the process more environmentally friendly. This is anticipated to cost the company $4 million.

 (vi)  Grange   has   a   property   located   in   a   foreign   country,   which   was   acquired   at   a   cost   of   8   million   dinars   on
      30 November 2008 when the exchange rate was $1 = 2 dinars. At 30 November 2009, the property was
      revalued to 12 million dinars. The exchange rate at 30 November 2009 was $1 = 1·5 dinars. The property
      was being carried at its value as at 30 November 2008. The company policy is to revalue property, plant and
      equipment whenever material differences exist between book and fair value. Depreciation on the property can be
      assumed to be immaterial.

(vii) Grange has prepared a plan for reorganising the parent company’s own operations. The board of directors has
      discussed   the   plan   but   further   work   has   to   be   carried   out   before   they   can   approve   it.   However,   Grange   has
      made a public announcement as regards the reorganisation and wishes to make a reorganisation provision at
      30 November 2009 of $30 million. The plan will generate cost savings. The directors have calculated the value
      in use of the net assets (total equity) of the parent company as being $870 million if the reorganisation takes
      place and $830 million if the reorganisation does not take place. Grange is concerned that the parent company’s
      property, plant and equipment have lost value during the period because of a decline in property prices in the
      region and feel that any impairment charge would relate to these assets. There is no reserve within other equity
      relating to prior revaluation of these non-current assets.
(viii) Grange uses accounting policies, which maximise its return on capital, employed. The directors of Grange feel that
     they are acting ethically in using this approach as they feel that as long as they follow ‘professional rules’, then there
     is no problem. They have adopted a similar philosophy in the way they conduct their business affairs. The fi nance
     director had recently received information that one of their key customers, Brook, a public limited company, was
     having serious liquidity problems. This information was received from a close friend who was employed by Brook.
     However, he also learned that Brook had approached a rival company Field, a public limited company, for credit
     and knew that if Field granted Brook credit then there was a high probability that the outstanding balance owed
     by Brook to Grange would be paid. Field had approached the director for an informal credit reference for Brook
     who until recently had always paid promptly. The director was intending to give Brook a good reference because
     of its recent prompt payment history as the director felt that there was no obligation or rule which required him to
     mention the company’s liquidity problems. (There is no change required to the fi nancial statements as a result of
     the above information.)

 Required:

 (a)  Calculate the gain or loss arising on the disposal of the equity interest in Sitin.                           (6 marks)

 (b)  Prepare a consolidated statement of fi nancial position of the Grange Group at 30 November 2009 in accordance
     with International Financial Reporting Standards.                                                            (35 marks)

 (c)  Discuss the view that ethical behaviour is simply a matter of compliance with professional rules and whether
     the fi nance director should simply consider ‘rules’ when determining whether to give Brook a good credit
     reference.                                                                                                     (7 marks)

     Professional marks will be awarded in part (c) for clarity and expression.

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发布于:2011-12-13 11:06
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发布于:2011-12-28 16:08
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justine0095
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发布于:2014-05-20 11:54
Thanks a lot!
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