Note 1 – Alpha’s investment in Beta
On 1 July 2012, Alpha acquired 120 million shares in Beta by means of a share exchange. The terms of the business combination were as follows:

– Alpha issued five shares for every six shares acquired in Beta. On 1 July 2012, the market value of an Alpha share was $2·40. This share issue has been correctly reflected in the financial statements of Alpha.

– Alpha will make a further cash payment of $50 million to the former shareholders of Beta on 30 June 2015. Alpha has made no entry in its financial statements in respect of this additional payment. At 1 July 2012, Alpha’s credit rating was such that it could have borrowed funds at an annual interest rate of 10%.

It is the group policy to value the non-controlling interest in subsidiaries at the date of acquisition at fair value. The market value of an equity share in Beta at 1 July 2012 was $1·70 and can be used for this purpose.

On 1 July 2012, the individual financial statements of Beta showed the following reserves balances:
– Retained earnings $98 million.
– Other components of equity $5 million (see Note 3 below).

The directors of Alpha carried out a fair value exercise to measure the identifiable assets and liabilities of Beta at 1 July 2012. The following matters emerged:

– Plant and equipment having a carrying value of $120 million had an estimated market value of $130 million. The estimated future economic life of the plant and equipment at 1 July 2012 was four years and this estimate remains valid. Beta has disposed of 20% of this plant and equipment since 1 July 2012.

– Intangible assets with an estimated market value of $12 million had not been recognised in the individual financial statements of Beta. At 1 July 2012, the estimated future economic lives of these intangible assets was five years.

The fair value adjustments have not been reflected in the individual financial statements of Beta. In the consolidated financial statements the fair value adjustments will be regarded as temporary differences for the purposes of computing deferred tax. The rate of deferred tax to apply to temporary differences is 20%.

No impairment of the goodwill on acquisition of Beta has occurred since 1 July 2012.

Note 2 – Alpha’s investment in Gamma
On 1 October 2012, Alpha acquired 48 million shares in Gamma for a total cash payment of $80 million. This share purchase followed an agreement with two other investors (who each purchased 36 million shares in Gamma on 1 October 2012) to exercise joint control over Gamma. All key operating and financial policies, including the distribution of profits, require the unanimous consent of the three investors. In its own financial statements Alpha treated the investment in Gamma as a financial asset and made an election to measure it at fair value through other comprehensive income. On 30 September 2013, the fair value of Alpha’s investment in Gamma was $82 million. Alpha did not recognise any deferred tax in respect of this restatement to fair value. Therefore on 30 September 2013 Alpha credited $2 million to other components of equity.

On 1 October 2012, the individual financial statements of Gamma showed the following reserves balances:

– Retained earnings $66 million. 
– Other components of equity $Nil

On 1 October 2012, there were no material differences between the carrying values of the net assets of Gamma in the individual financial statements and the fair values of those net assets.

You do not need to consider the deferred tax implications of Alpha’s investment in Gamma when preparing the consolidated statement of financial position of the Alpha group.

Note 3 – Property, plant and equipment of Beta
Beta measures its land under the revaluation model. The other components of equity of Beta consist entirely of revaluation surpluses arising on the revaluation of its land. On 1 July 2012, the carrying value of Beta’s land in Beta’s own financial statements was the same as its fair value. On 30 September 2013, Beta revalued its land by $7·5 million. As a result of this revaluation, Beta recognised an additional deferred tax liability of $1·5 million and credited $6 million to other components of equity. The policy of Alpha and Gamma is to use the cost model to measure all property, plant and equipment. This is the policy to be adopted in the consolidated financial statements.

Note 4 – Intangible assets of Alpha and Beta
The intangible assets of Alpha comprise expenditure incurred during the year on a project to reduce wastage incurred during the group’s production processes. The project began on 1 November 2012 and is expected to be complete by 31 May 2014. Expenditure to date has been $5 million each month. On 1 June 2013, the directors were able to assess the technical feasibility and commercial viability of the project with reasonable certainty. At this date they also received assurance that the economic benefits the project was likely to bring to the group were likely to exceed the total project costs.

The intangible assets in the individual financial statements of Beta represent goodwill which arose on acquisition of an unincorporated business in 2008. No impairment of this goodwill has been necessary since the date of acquisition of Beta by Alpha.

Note 5 – Inter-company sale of inventories 
The inventories of Beta and Gamma at 30 September 2013 included components produced by Alpha. The selling price of the components included in the inventories of Beta was $14 million. The selling price of the components included in the inventories of Gamma was $12 million. Alpha applied a mark up of one-third of its production cost in arriving at the sales price of these components. You can ignore deferred tax when making any adjustments due to the information in this note.

Note 6 – Trade receivables and payables
The trade receivables of Alpha included $8 million receivable from Beta and $7 million receivable from Gamma in respect of the purchase of components (see Note 5). The trade payables of Beta and Gamma included equivalent amounts payable to Alpha.

Note 7 – Forward currency contract
During July and August 2013 Alpha conducted a large marketing effort in Country X. The currency in Country X is the Euro. Alpha made no sales to customers in Country X in the year ended 30 September 2013 but is very confident of making substantial sales to such customers in the year ended 30 September 2014. On 5 September 2013, Alpha entered into a contract to sell €20 million for $28 million on 31 October 2013. Currency fluctuations in September 2013 were such that on 30 September 2013 the fair value of this currency contract was $1·1 million (a financial asset). The draft financial statements of Alpha do not include any amounts in respect of this currency contract since it has a zero cost. Alpha wishes to use hedge accounting whenever permitted by International Financial Reporting Standards. Alpha expects sales to customers in Country X to be at least €22 million in October 2013.

Note 8 – Long-term borrowings 
The long-term borrowings of Alpha include a loan at a carrying amount of $60 million which was taken out on 1 October 2012. The loan does not carry any interest but $75·6 million is repayable on 30 September 2015. This represents an effective annual rate of return for the investors of 8%. As an alternative to repayment, the investors can exchange their loan asset for equity shares in Alpha on 30 September 2015. The annual rate of return required by such investors on a non-convertible loan would have been 10%. Alpha has not charged any finance cost in respect of this loan for the year ended 30 September 2013.

The present value of $1 payable/receivable in three years’ time is as follows:
– 79·4 cents when the discount rate is 8% per annum.
– 75·1 cents when the discount rate is 10% per annum.

Required:
Prepare the consolidated statement of financial position of Alpha at 30 September 2013.

Note: You should show all workings to the nearest $’000.