1. BCCI, a public listed company, acquired 75% of Gambhirs ordinary shares on 1 April 20X4. BCCI paid an immediate $3.

50 per share in cash and agreed to pay a further amount of $108 million on 1 April 20X5. BCCIs cost of capital is 8% per annum. BCCI has recorded the cash consideration of $3.50 per share. The summarised statements of financial of the two companies at 31 March 20X5 are shown below: BCCI Gambhir

The following information is relevant: (i) BCCI has a policy of revaluing land and buildings to fair value. At the date of acquisition Gambhirs land and buildings had a fair value $20 million higher than their book value and at 31 March 20X5 this had increased by a further $4 million (ignore any additional depreciation) (ii) Included in BCCIs investments is a loan of $60 million made to Gambhir at the date of acquisition. Interest is payable annually in arrears. Gambhir paid the interest due for the year on 31 March 20X5, but BCCI did not receive this until after the year end. BCCI has not accounted for the accrued interest from Gambhir. (iii) Gambhir had established a line of products under the brand name of Gauti. Acting on behalf of BCCI, a firm of specialists, had valued the brand name at a value of $40 million with an estimated life of 10 years at 1 April 20X4. The brand is not included in Gambhirs statement of financial position. (iv) Gambhirs development project was completed on 30 September 20X4 at a cost of $50 million. $10 million of this had been amortised by 31 March 20X5. Development costs capitalised by Gambhir at the date of acquisition were $18 million. BCCIs directors are of the opinion that Gambhirs development costs do not meet the criteria in IAS 38 Intangible Assets for recognition as an asset.

(v) Gambhir sold goods to BCCI during the year at a profit of $6 million. One-third of these goods were still in the inventory of Gambhir at 31 March 20X5. (vi) An impairment test at 31 March 20X5 on the consolidated goodwill concluded that it should be written down by $22 million. No other assets were impaired. (vii) It is the group policy to value the non-controlling interest at full fair value. At the date of acquisition the directors estimated the fair value of the non-controlling interest to be $74m. (a) Calculate the following figures as they would appear in the consolidated statement of financial position of BCCI at 31 Match 20X5: a. Goodwill b. Non-controlling interest c. The following consolidated reserves share premium, revaluation surplus and retained earnings. Note. Show your workings (b) Explain why consolidated financial statements are useful to the users of financial statements (as opposed to just the parent companys separate (entity) financial statements).