Power is a listed group reporting under IFRS. The group was established when Power purchased an 80% of the ordinary share capital of Shuttle, a listed company, on 1 January 2009 for $7.6 million. At that date, Shuttle's financial statements showed retained earnings of $4.6 million and a revaluation surplus of $570,000.
The fair value of Shuttle's net assets at the date of acquisition was higher than their carrying amount due to the following items:
Contractual customer relationships not recognised in Shuttle's financial statements 200
Excess of market value over the carrying amount of inventories 30
The customer relationships were deemed to have an average remaining useful life of five years at 1 January 2009. The inventories were sold later in that year.
Power opted to measure the non-controlling interests in Shuttle at their fair value at the date of the acquisition. The share price of Shuttle on that date was $18.00.
During the current year, on 1 April 2010, Power was able to purchase another 10% of the ordinary share capital of Shuttle from a minority shareholder at a cost of $1.18 million.
Prepare the consolidated statement of financial position of the Power Group (as a consolidation schedule) as at 31 December 2010.
- Ignore any deferred tax effect of adjustments.
- Work to the nearest $1,000.
Explain and briefly justify the key changes being made to consolidation proposed by ED 10 Consolidated Financial Statements.