Reference no: EM133081476
Question - On January 1, 2021 Berlian Bhd. acquired 640,000 units of equity shares of Permata Sdn. Bhd. The purchase consideration was in the form of RM800,000 cash and the issuance of 360,000 units of Berlian Bhd equity shares at a market value of RM2.50 per share. The latest Statements of Financial Position of both companies prior to the acquisition date are as follows:
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Berlian Bhd.
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Permata Sdn. Bhd.
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RM'000
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RM'000
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Property, plant and equipments:
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Property
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2,000
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800
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Plant & equipment
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600
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400
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Current assets
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1,400
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600
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4,000
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1,800
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Equity shares, average price RM1.00 per share
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2,000
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800
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Retained earnings
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1,200
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400
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Long-term liabilities
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600
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400
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Current liabilities
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200
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200
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4,000
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1,800
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In determining the purchase price, the following information is taken into account by Berlian and Permata:
Fair value of Permata's property isRM1,000,000.
Fair value of Permata's plant and equipment is RM360,000.
Permata owns a trademark worth RM400,000.
Required -
a) Determine the interest of Berlian Bhd in Permata Sdn. Bhd.
b) Determine the investment cost in Permata Sdn. Bhd. which needs to be recorded by Berlian Bhd.
c) Determine the fair value of the net assets of Permata Sdn. Bhd. on the acquisition date.
d) Determine the value of goodwill on the acquisition if the non -controlling interest is measured at full fair value.
e) Determine the value of goodwill on the acquisition if the non -controlling interest is measured at the fair value of the net assets.
f) Determine the value of the non-controlling interest to be reported in the statement of financial position of the Berlian Bhd Group on January 1, 2021 if the non-controlling interest is measured at full fair value.
g) Based on the information in e) above, prepare Consolidated Statement of Financial Position as at 1 January 2021.