"IFRS 10 Consolidated Financial Statements states that there are few ways toascertain if the investor 'controls' and 'influences' its investees."Evaluate the statement above with reference to any applicable accountingstandard and demonstrate the application of IFRS 10 Consolidated financialstatements with the scenario provided below. Further, you must prepare asimplified consolidated statement of financial position as at 31st December 2020а.to support your demonstration.Scenario:P acquires 100% of S's ordinary shares for RM1,500,000 on 31st December2018. S's reserves (consists of only retained earnings) were RM 400,000 at thedate of acquisition. The following presents the statement of financial position ofboth companies as at 31st December 2020.PSNotesRMRMAs at 31st Dec 2020000.*000Non-current assets:Property, Plant and equipmentGoodwill2,0001,000Investment in S1,500Net current asset3002003,8001,200Share capital300800Retained earnings3,5004003,8001,200 Assuming P omitted certain transactions as illustrated below. You must discussabout the accounting treatment for the omitted (i) and (ii) with reference to anyapplicable accounting standard.P acquired a new warehouse for RM1,000,000 on 1st Jan 2020 with anestimated useful life of 20 years. The factory was brought into useimmediately on the same day. The company adopts a cost model for allproperty, plant and machinery.With a surplus funds of few millions, P invested in a number ofcommercial lots for RM3,000,000 during the year of 2020. Theseproperties are estimated to have a 20-years of useful life. The marketvalue of these properties stands at RM3,300,000 at the end of December2020.i)ii)

Given Data: Applicable Accounting Standard - IFRS 10- Consolidated Financial Statements. P acquired…

Assuming P omitted certain transactions as illustrated below. You must discuss about the accounting treatment for the omitted (i) and (ii) with reference to any applicable accounting standard. P acquired a new warehouse for RM1,000,000 on 1st Jan 2020 with a estimated useful life of 20 years. The factory was brought into us immediately on the same day. The company adopts a cost model for a property, plant and machinery. i) With a surplus funds of few millions, P invested in a number o commercial lots for RM3,000,000 during the year of 2020. Thes properties are estimated to have a 20-years of useful life. The marke value of these properties stands at RM3,300,000 at the end of Decembe

Assuming P omitted certain transactions as illustrated below. You must discuss about the accounting treatment for the omitted (i) and (ii) with reference to any applicable accounting standard. P acquired a new warehouse for RM1,000,000 on 1st Jan 2020 with a estimated useful life of 20 years. The factory was brought into us immediately on the same day. The company adopts a cost model for a property, plant and machinery. i) With a surplus funds of few millions, P invested in a number o commercial lots for RM3,000,000 during the year of 2020. Thes properties are estimated to have a 20-years of useful life. The marke value of these properties stands at RM3,300,000 at the end of Decembe

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

"IFRS 10 Consolidated Financial Statements states that there are few ways to
ascertain if the investor 'controls' and 'influences' its investees."
Evaluate the statement above with reference to any applicable accounting
standard and demonstrate the application of IFRS 10 Consolidated financial
statements with the scenario provided below. Further, you must prepare a
simplified consolidated statement of financial position as at 31st December 2020
а.
to support your demonstration.
Scenario:
P acquires 100% of S's ordinary shares for RM1,500,000 on 31st December
2018. S's reserves (consists of only retained earnings) were RM 400,000 at the
date of acquisition. The following presents the statement of financial position of
both companies as at 31st December 2020.
P
S
Notes
RM
RM
As at 31st Dec 2020
000.
*000
Non-current assets:
Property, Plant and equipment
Goodwill
2,000
1,000
Investment in S
1,500
Net current asset
300
200
3,800
1,200
Share capital
300
800
Retained earnings
3,500
400
3,800
1,200

Assuming P omitted certain transactions as illustrated below. You must discuss
about the accounting treatment for the omitted (i) and (ii) with reference to any
applicable accounting standard.
P acquired a new warehouse for RM1,000,000 on 1st Jan 2020 with an
estimated useful life of 20 years. The factory was brought into use
immediately on the same day. The company adopts a cost model for all
property, plant and machinery.
With a surplus funds of few millions, P invested in a number of
commercial lots for RM3,000,000 during the year of 2020. These
properties are estimated to have a 20-years of useful life. The market
value of these properties stands at RM3,300,000 at the end of December
2020.
i)
ii)

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