• Prepare a consolidated statement of financial position for a simple group (one or more subsidiaries) dealing with pre and post acquisition profits, non-controlling interests and goodwill
• Explain the need for using coterminous year ends and uniform accounting polices when preparing consolidated financial statements and describe how it is achieved in practice
• Prepare a consolidated statement of profit or loss, statement of profit or loss and other comprehensive income and statement of changes in equity for a simple group (one or more subsidiaries), including an example where an acquisition or disposal of an entire interest occurs during the year and there is a non-controlling interest.
• Explain why it is necessary for both the consideration paid for a subsidiary and the subsidiary’s identifiable assets and liabilities to be accounted for at their fair values when preparing consolidated financial statements.
• Compute the fair value of the consideration given including the following elements:
- Share exchanges
- Deferred consideration
- Contingent consideration.
• Prepare consolidated financial statements dealing with fair value adjustments (including their effect on consolidated goodwill) in respect of:
– Depreciating and non-depreciating noncurrent assets
– Deferred tax
– Assets and liabilities (including contingencies), not included in the subsidiary’s own statement of financial position.