Chapter 32

Further consolidation issues IV: Accounting for changes in degree of

ownership of a subsidiary
32.1

AASB 127 requires that where a parent entitys loss of control of a subsidiary occurs during
a financial year, the consolidated income statement shall include the results of the subsidiary
for that part of the financial year during which the parent entity had control of the
subsidiary.

32.2

From the individual perspective of the parent entity, the profit or loss on sale of the shares
will be the difference between the carrying value of the shares (at cost or at a fair value
pursuant to AASB 139) and the fair value of the sales proceeds. From the groups
perspective, however, consideration must be given to the economic entitys share of postacquisition profits and reserve movements less any adjustments for impairment of purchased
goodwill before we are able to determine the profit or loss on sale. Hence, profit on sale is
calculated differently from the perspective of the parent entity and from the perspective of
the economic entity, and so we would not expect the twp profits to be the same.

32.3

Yes we do need to know the fair value of the investees net assets at every investment date.
If we do not consider the fair value of the assets at each acquisition date then we will not
obtain a correct measure of total purchased goodwill. As paragraph 58 of AASB 3 Business
Combinations states:
A business combination may involve more than one exchange transaction, for
example when it occurs in stages by successive share purchases. If so, each
exchange transaction shall be treated separately by the acquirer, using the cost of
the transaction and fair value information at the date of each exchange
transaction, to determine the amount of any goodwill associated with that
transaction. This results in a step-by-step comparison of the cost of the individual
investments with the acquirers interest in the fair values of the acquirees
identifiable assets, liabilities and contingent liabilities at each step.
The above step-by-step approach requires that:

Each individual investment in the subsidiary is accounted for separately, meaning that
we will have multiple consolidation elimination entries.

Once control of the subsidiary is established, the consolidation worksheet entries will
eliminate the various investments in the subsidiary against the parent entitys respective
share of the subsidiarys net identifiable assets as at the respective investment dates (at
fair value). This will include investments made prior to gaining control of the subsidiary.

Because eliminations of each investment are made as at the various investment dates we
need to restate the subsidiarys assets to fair value as at each exchange date. This means
that we might have numerous entries to revalue the net assets to fair value.

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For each investment elimination we will calculate a separate amount of goodwill. This
means that the total goodwill acquired for a subsidiary could be the sum of a number of
individual transaction calculations as reflected in a number of investment elimination
entries.

Hence, where there are a series of investments in a subsidiary we will need to revalue the
assets of the subsidiary to fair value as at the date of each separate investment. In relation to
such a series of revaluations, paragraph 59 of AASB 3 states:
When a business combination involves more than one exchange transaction, the fair
values of the acquirees identifiable assets, liabilities and contingent liabilities may
be different at the date of each exchange transaction. Because:
(a)

the acquirees identifiable assets, liabilities and contingent liabilities are

notionally restated to their fair values at the date of each exchange transaction
to determine the amount of any goodwill associated with each transaction;
and

(b)

the acquirees identifiable assets, liabilities and contingent liabilities must then
be recognised by the acquirer at their fair values at the acquisition date,

any adjustment to those fair values relating to previously held interests of the
acquirer is a revaluation and shall be accounted for as such. However, because this
revaluation arises on the initial recognition by the acquirer of the acquirees assets,
liabilities and contingent liabilities, it does not signify that the acquirer has elected
to apply an accounting policy of revaluing those items after initial recognition in
accordance with, for example, AASB 116 Property, Plant and Equipment.
32.4

Once control of the subsidiary is established, the consolidation worksheet entries will
eliminate the various investments in the subsidiary against the parent entitys respective
share of the subsidiarys net identifiable assets as at the respective investment dates (at fair
value). This will include investments made prior to gaining control of the subsidiary. It is
emphasised that the series of eliminations of past investment transactions only commences
when the parent entity establishes control.
Once control is established each past and future investment in the subsidiary is accounted
for separately, meaning that we will have multiple consolidation elimination entries.
For each investment elimination we will calculate a separate amount of goodwill. This
means that the total goodwill acquired for a subsidiary could be the sum of a number of
individual transaction calculations as reflected in a number of investment elimination
entries.

32.5

(a)

As the textbook states, within the financial statements of the parent entity, the
investment in the subsidiary would be shown at cost, or perhaps, at fair value. From
the perspective of the parent entity alone, the profit or loss on sale of the shares will
be the difference between the carrying value of the shares (at cost, or at fair value),
and the value of the sales proceeds.

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(b)

32.6

From the groups (or economic entitys) perspective, however, consideration must be
given to the economic entitys share of post-acquisition profits and reserve
movements and any impairment of purchased goodwill before we are able to
determine the profit or loss on sale. That is, the gain or loss to the economic entity
would be determined as the difference between the sale price, and the sum of the
original cost of the ownership interest sold and the share of the post-acquisition
movements in the entitys profits and reserves (the post-acquisition movements
would include the recognition of any goodwill impairment).

Accounting for first acquisition40%

$
Cost of acquisition
Fair value of identifiable assets
Ownership interest

8 000 000
40%
3 200 000
$ 800 000

Purchased goodwill
Dr
Dr
Dr
Dr
Dr
Cr

Share capital
General reserve
Asset revaluation reserve
Retained earnings
Goodwill
Investment in MKT

$
4 000 000

400 000
600 000
600 000
1 600 000
800 000
4 000 000

Elimination of JTs first acquisition of 40 per cent of the share capital of MKT against the
pre-acquisition equities of MKT at the date of the initial acquisition.
Accounting for second acquisition12%
$
Cost of acquisition
Fair value of identifiable assets
Ownership interest

9 800 000
12%
1 176 000
$ 24 000

Purchased goodwill
Dr
Dr
Dr
Dr
Dr
Cr

Share capital
General reserve
Asset revaluation reserve
Retained earnings
Goodwill
Investment in MKT

$
1 200 000

120 000
240 000
240 000
576 000
24 000
1 200 000

Elimination of JTs second acquisition of 12 per cent of the share capital of MKT against the
pre-acquisition equities of MKT at the date of the second acquisition.
Accounting for third acquisition38%
$

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Cost of acquisition
Fair value of identifiable net assets
Ownership interest

4 400 000
10 200 000
38%
3 876 000
524 000

Purchased goodwill
Dr
Dr
Dr
Dr
Dr
Cr

Share capital
General reserve
Asset revaluation reserve
Retained earnings
Goodwill
Investment in MKT

380 000
836 000
760 000
1 900 000
524 000
4 400 000

Elimination of JTs final acquisition of 38 per cent of the share capital of MKT against the
pre-acquisition equities of MKT at the date of the final acquisition.
If the consolidation is to be treated using the step-by-step acquisition method (the method
used above) the following aggregated consolidation journal entry would be raised as at 30
June 2009.

Dr
Dr
Dr
Dr
Dr
Cr

Share capital
General reserve
Asset revaluation reserve
Retained earnings
Goodwill
Investment

40%
400 000
600 000
600 000
1 600 000
800 000
4 000 000

12%
120 000
240 000
240 000
576 000
24 000
1 200 000

38%
380 000
836 000
760 000
1 900 000
524 000
4 400 000

Total
900 000
1 676 000
1 600 000
4 076 000
1 348 000
9 600 000

Minority interest
At 30 June 2009 the minority interest in MKT Ltd is 10 per cent of the net assets. This
equates to 0.10 $11 700 000 = $1 170 000.
In considering the movements in retained earnings during the year, we can see from the
above aggregated entry that $4 076 000 of the retained earnings of MKT has been treated as
pre-acquisition. As retained earnings of MKT has increased from $4 000 000 to $5 500 000
during the period, $1 424 000 will be treated as post-acquisition earnings, of which minority
interests have a $550 000 share.
In terms of the balance sheet, the following disclosures may be found:
Extract from the 30 June 2009 balance sheet of JT Ltd and its controlled entities.
Parent entity
interest
$000
Shareholders funds
Share capital
General reserve

Minority
interest
$000

*
*

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220

Total
$000
*
*

324

Asset revaluation reserve

Retained earnings

*
*
*

300
550
1 170

*
*
*

* Insufficient information about the parent entity account balances.

32.7

Income statement
Profit before tax
Tax
Profit after tax
Retained earnings
30 June 2007
Dividends proposed
Balance sheet
Shareholders equity
Retained earnings
30 June 2008
Share capital

Richards
Company
$000

Twinny
Company
$000

1 200
600
600
2 000

200
80
120
800

2 600
200

920
160

2 400

760

8 000

2 000

Eliminations and
adjustments
Dr
Cr
$000
$000
1603

Consolidated

statement
$000
1240
680
560

2401,
3202
1603

2 240
2 800
200

2 600

200

12001,
8002
802

400
200

40
160

1604

1 000
12 000

840
4 000

1 840
13 200

Current assets
Cash
Accounts receivable
Dividends receivable
Inventory

340
500
160
1 000

200
350

650

540
850

1 650

Non-current assets
Land
Plant
Investment in Twinny Ltd

4 000
3 000
3 000

1 000
1 800

12 000

4 000

Revaluation reserve
Current liabilities
Accounts payable
Dividends payable
Non-current liabilities
Loans

Goodwill

8 000
120
440
200

1604

3601
3 320

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18001,
12002
____
3 320

5 000
4 800

360
13 200

325

Consolidation adjustments
1.

Dr
Dr
Dr
Cr

Share capital
Retained earnings
Goodwill
Investment in Twinny Ltd

1 200 000
240 000
360 000
1 800 000

Elimination of the first acquisition.

2.

Dr
Dr
Dr
Cr

Share capital
Retained earnings
Asset revaluation reserve
Investment in Twinny Ltd

800 000
320 000
80 000
1 200 000

Elimination of the second acquisition.

3.

Dr
Cr

Dividend income
Dividend proposed

160 000
160 000

Elimination of inter-company dividend.

4.

Dr
Cr

Dividend payable
Dividend receivable

160 000
160 000

Elimination of inter-company dividend.

32.8

From Cactus Ltds individual perspective, a profit of $300 000 has been made. The journal
entry in Cactus Ltds own journal (and not in the consolidation journal) would be:
Dr
Cr
Cr

Cash
Investment in Castles Ltd
Profit on sale of investment

2 300 000
2 000 000
300 000

From the groups perspective, however, the profit is not $300 000. To determine the profit
from the groups perspective we need to consider post-acquisition movements in the
reserves of Castles Ltd, and any goodwill that has been impaired.
Cost of investment
Plus:
Share of post-acquisition movement in
Retained earnings (0.6 300 000)
Share of post-acquisition movement in
Asset revaluation reserve (0.6 300 000)
Less:
Goodwill impairment expenses (20%) to 30 June 2009
Sale proceeds
Gain to economic entity

$2 000 000
180 000
180 000
(160 000)
2 200 000
2 300 000
$ 100 000

The consolidation adjusting entries would be (at an aggregated level):

Dr

Profit after tax

240 000*

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Dr
Cr

Retained earnings
Asset revaluation reserve

60 000**
180 000***

* The $240 000 reduction in consolidated profit after tax is calculated as follows:
Share of subsidiarys reported profit for the
2009 financial year: $200 000 x 0.6:
$120 000
Goodwill amortisation recognised in 2009
($160 000)
Economic entitys profit on sale of subsidiary
$100 000
Parent entitys profit on sale of subsidiary
($300 000)
Reduction in consolidated profit
$240 000
** The parent entitys share of post-acquisition earnings to 30 June 2008 is calculated as
follows:
Retained earnings of Castles at 30 June 2009
$1 000 000
Profits for year ending 30 June 2009
$200 000
Retained earnings of Castles at 30 June 2008
$800 000
Retained earnings at acquisition date (30 June 2007)
$700 000
Increase in retained earnings to 1 July 2008
$100 000
Cactus Ltds share: $100 000 x 0.60:
$60 000
*** Although we have credited the asset revaluation reserve with the share of postacquisition movements in the reserve, what must be considered is that the assets which
relate to this reserve were held in the subsidiarywhich has been sold. The balance of the
reserve could be transferred to retained earnings.
32.9

Preparing the consolidated worksheet for Angle Ltd and its controlled entity
Elimination of investment and recognition of goodwill
Each acquisition of shares must be accounted for separately, in chronological order.
Acquisition on 1 July 2006
Purchase cost
$2 000 000
Proportional share of net assets acquired ($2 400 000 x 0.60)
$1 440 000
Goodwill acquired
$560 000
(a)
Dr
Dr
Dr
Cr

Elimination entry
Share capital
Retained earnings
Goodwill
Investment in Sea Ltd

1 200 000
240 000
560 000
2 000 000

Acquisition on 1 July 2008

Purchase cost
Proportional share of net assets acquired ($3 000 000 x 0.40)
Goodwill acquired
(b) Second elimination entry
Dr
Share capital
Dr
Retained earnings
Dr
Revaluation reserve

$1 400 000
$1 200 000
$200 000

800 000
320 000
80 000

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Dr
Cr

Goodwill
Investment in Sea Ltd

200 000
1 400 000

Impairment of goodwill
We have been told that the recoverable amount of the purchased goodwill as at 30 June 2009
was $600 000. We are also told that all the impairment in relation to purchased goodwill was
to be recognised in the 2009 financial year.
Goodwill relating to first investment on 1 July 2006
Goodwill relating to second investment on 1 July 2008
Total purchased goodwill
Recoverable amount of goodwill as at 30 June 2009
Impairment to be recognised in 2009 financial year

$560 000
$200 000
$760 000
$600 000
$160 000

There are no taxation implications, as impairment losses relating to goodwill are considered
a permanent difference because they are not deductible for taxation purposes.
(c)
Dr
Cr

Entry to recognise impairment of goodwill

Impairment loss - goodwill
160 000
Accumulated impairment losses - goodwill

160 000

Elimination of dividends
Given that Sea Ltd was 100 per cent owned by Angle Ltd, and hence there are no minority
interests, all dividends from the subsidiary are to be eliminated.
(d) Dr Dividend payable (balance sheet) 160 000
Cr Dividend proposed
(e)

Dr Dividend income
160 000
Cr Dividend receivable (balance sheet)

160 000
160 000

The above entries are posted to the consolidation worksheet as follows:

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Consolidation worksheet for Angle Ltd and its controlled entity for the year ending 30 June 2009
Eliminations
Angle
Ltd

Sea
Ltd

Dr

($000)

($000)

($000)

600

560

160(c)
160(e)

Cr Consolidated

($000)

($000)

Reconciliation of opening and

closing retained earnings
Profit before tax
Tax expense

(300)

(200)

Profit after tax

Retained earnings - 30 June 2008

300
1 000

360
800

Dividends proposed

1 300
100

1 160
160

1 200
4 000

1 000
2 000

840
500
340
1 240

240(a)
320(b)
160(d)

1 580
100.0

Balance sheet
Shareholders equity
Retained earnings
Share capital
Revaluation reserve

1 480
4 000

1 200(a)
800(b)

200 80(b)

120

Current liabilities
Accounts payable
Dividends payable

200
100

240
160

440
100

160(d)

Non-current liabilities
Loans

500

400

900

6 000

4 000

7 040

100
300
160
340

500
600

400

600
900

740

1 000
700
3 400

1 500
1 000

Current assets
Cash
Accounts receivable
Dividends receivable
Inventory

160(e)

Non-current assets
Land
Plant
Investment in Sea Ltd
Goodwill
Accumulated impairment losses - goodwill

2 000(a)
1 400(b)

_____

_____

560(a)
200(b)
_____

6 000

4 000

3 880

2 500
1 700

760

160(c)
3 880

(160)
7 040

32.10 From Angle Ltds individual perspective, a profit of $400 000 has been made, which is the
difference between the proceeds from sale ($3 800 000) and the carrying value of the
investment in the separate accounts of Angle Ltd ($3 400 000). We need to know what profit
on sale was included in the parent entitys accounts as this will need to be reversed out. The
journal entry in Angle Ltds own journal (and not the consolidation worksheet) on 1 July
2009 would be:
Dr
Cr
Cr

Cash
Investment in Sea Ltd
Profit on sale of investment

3 800 000
3 400 000
400 000

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From the economic entitys perspective, however, the profit is not $4 00 000. To determine
the profit from the groups perspective, we need to consider the post-acquisition movements
in the reserves of Sea Ltd and any goodwill that has been impaired.
Cost of investment
plus:
Share of post-acquisition movement in retained earnings
First acquisition ($1 000 000 minus $400 000) x 0.60
Second acquisition ($1 000 000 minus $800 000) x 0.40
Share of post-acquisition movement in revaluation reserve
First acquisition ($200 000 minus $0) x 0.60
Second acquisition ($200 000 minus $200 000) x 0.35
less:
Accumulated goodwill impairment losses to 30 June 2009

$3 400 000
$360 000
$80 000
$120 000
0
($160 000)
$3 800 000
$3 800 000

Sale proceeds
Gain to economic entity from sale of subsidiary

$nil

The consolidation adjusting journal entries in the 2010 financial year would be:
Dr
Cr
Cr

Profit on sale of investment

Retained earnings
Revaluation reserve

400 000
280 000*
120 000

* 280 000= share of post-acquisition movements in retained profits to 30 June 2009 less accumulated
goodwill impairment losses = $360 000 plus $80 000 minus $160 000

The above two entries to be made in the 2010 financial year will ensure that the opening
retained earnings and revaluation reserve balances for the 2010 financial year are the same
as the closing retained earnings in the 2009 financial year. Although the above entry has
credited the revaluation reserve with the share of post-acquisition movements in the reserve
(being $120 000), what must be considered is that the assets that relate to this reserve were
held in the subsidiary, which has been sold. An issue here is what to do with the remaining
balance in the revaluation reserve. AASB 116, paragraph 41, provides some guidance in this
regard. It states:
The revaluation reserve included in equity in respect of an item of property, plant
and equipment may be transferred directly to retained earnings when the asset is
derecognised (that is, eliminated from the balance sheet). This may involve
transferring the whole of the surplus when the asset is retired or disposed of.
Hence, in 2010 we could put through a further consolidation worksheet journal entry to
transfer the revaluation reserve balance of $120 000 to retained earnings.
Dr Revaluation reserve
120 000
Cr Retained earnings
120 000

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32.11 (a) General journal entry to record the sale of shares in Tavish Ltd (in Mac
Ltds accounts)
Calculation of the gain on sale of shares in Tavish Ltd as recorded in the separate
accounts of Mac Ltd
Proceeds from sale of shares in Tavish Ltd
7 000 000
less Carrying amount of shares in Tavish Ltd
5 600 000
Gain on sale of shares in Tavish Ltd recorded by Mac Ltd
1 400 000
The journal entry in the separate accounts of Mac Ltd would have been:
Dr
Cr
Cr

Cash at bank
7 000 000
Gain on sale of shares in Tavish Ltd
Investment in Tavish Ltd

1 400 000
5 600 000

We need to know the above journal entry so that in the consolidation worksheet we can
eliminate the profit recognised in the accounts of Mac Ltd for the sale of shares in Tavish
Ltd.
(b) Consolidation worksheet journal entries
Prior to the sale of the subsidiary there could have been an impairment of purchased
goodwill that needs to be accounted for separately. We are told that as at 31 December 2008
the recoverable amount of the goodwill was assessed to be $315 000. To determine the
extent of any impairment we need to determine the amount of goodwill initially purchased.
This is calculated as follows:
Determination of goodwill acquired, and related impairment cost for 2009
Tavish Ltd
Mac Ltds
80% interest
$
$
$
Share capital at acquisition date
3 500 000
2 800 000
Retained earnings at acquisition date
1 400 000
1 120 000
Revaluation reserve
Balance per Tavish Ltds accounts at
30 June 2006
1 050 000
Fair value adjustment for land after tax
($4 900 000 - $4 200 000) x (1 - 0.3)
490 000
1 540 000
1 232 000
5 152 000
Cost of investment in Tavish Ltd
5 600 000
Purchased goodwill
448 000
Recoverable amount as at 31 December 2008
315 000
Impairment expense to be recognised in year ending 30 June 2009
133 000
The above amount of $133 000 will need to be recognised separately from any gain or loss
on the sale of the subsidiary.
Before we provide the consolidation worksheet journal entries we need to work out the
profit or loss on the sale of the subsidiary from the economic entitys perspective.

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Gain or loss on the sale of Tavish Ltd from the perspective of the economic entity
Cost of investment
$5 600 000
plus:
Share of post-acquisition movement in retained earnings to 30 June
2008, that is to the end of the preceding financial year
(0.8 x [2 660 000 1 400 000])
Share of profits for the period during 2009 for which Tavish Ltd
was a subsidiary = 0.8 x $504 000 x 9/12
(the subsidiary was controlled for nine months of the year)

$1 008 000

$302 400

Share of dividends paid from 2009 profits = 0.8 x $140 000

($112 000)

Share of post-acquisition movement in asset revaluation reserve

= 0.8 x (2 184 000 1 540 000), where $1 540 000 reflects the
adjusted balance of revaluation reserve at the date of acquisition

$515 200

less:
Accumulated goodwill impairment losses to 31 March 2009

($133 000)
$7 180 600

Sale proceeds
Loss to economic entity

$7 000 000
$180 600

Reversal of gain on sale of shares in Tavish Ltd as recorded in the separate accounts of
Mac Ltd and recording loss on sale of shares in Tavish Ltd from the groups perspective
(a) Dr
Dr
Dr
Dr
Cr
Cr
Cr

Gain on sale of shares in Tavish Ltd

1 400 000
Loss on sale of shares in Tavish Ltd
180 600
Impairment loss - goodwill (current year expense)133 000
Dividend revenue
112 000
Retained earnings - 1 July 2008
Profit after income tax expense
Revaluation reserve

1 008 000
302 400
515 200

A number of comments can be made in relation to the above journal entry. We have reversed
out the profit on the sale of shares as recorded in the separate accounts of Mac Ltd and we
have included the former subsidiarys profit in the consolidated financial statements for
those nine months in which it was controlled by Mac Ltd. The entire profit for nine months
has been included (it is not reduced to take account of any minority interest).
Next we need to substitute the individual revenues and expenses for the share of profit ($302
400) shown above. We do this as the consolidated income statement includes the respective
balances of the individual revenue and expense accounts, subject to adjustments for
intragroup transactions. Although Tavish Ltd was only 80 per cent owned, we know that we
nevertheless have to include 100 per cent of the revenues and expenses for the period for
which the subsidiary was controlled. This will necessitate the inclusion of a minority
interests share in the profit of Tavish Ltd. Given that there were no intragroup transactions,
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the minority interest in the profit for the nine months to 31 March 2009 will equal $504 000
x 0.2 x 9/12 = $75 600. The following consolidation journal entry will serve:
(b)

Dr
Dr
Dr
Dr
Cr

Profit after income tax expense

Expenses (for first three quarters of
the year [5,320,000 x .75])
Income tax expense (for first three quarters
of the year [336,000 x .75])
Minority interest in profit after income
tax expense
Sales revenue (for first three quarters of
the year [6,160,000 x .75])

302 400
3 990 000
252 000
75 600
4 620 000

We are now in a position to transfer the above consolidation worksheet journal entries to the
consolidation worksheet. As we will see on the worksheet, there is no column for Tavish Ltd. This
is because we only create a column for those subsidiaries controlled at balance date. It would be
inappropriate to include the assets, liabilities and equity accounts of organisations that were not
controlled by a parent entity at balance date. As a result, there is also no minority interest in share
capital or reserves of the subsidiary. We have included a debit to an account called minority interest
in profit after income tax expense. This is used because we have included all of the income and
expenses of the subsidiary for the nine months to 31 March 2009, even though the parent only had
an 80 per cent interest. As can be seen in the following financial statements, this $75,600 will be
shown on the face of the income statement, but has no corresponding position within the balance
sheet.

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Consolidation worksheet as at 30 June 2009

Eliminations
and adjustments
Mac Ltd
($000)

Sales revenue
Dividend revenue
Gain on sale of shares in Tavish Ltd
Loss on sale of shares in Tavish Ltd
Expenses
Impairment loss goodwill
Profit before income tax
Income tax expense
* Profit after income tax
Profit after income tax
Minority interest in profit after tax
Parent entity interest in profit after tax
Retained earnings - 1 July 2008
Interim dividend
Retained earnings - 30 June 2009
Share capital
Revaluation reserve
Total shareholders equity
Mortgage loan
Deferred tax liability
Total equities
Cash
Accounts receivable
Inventory
Land
Buildings
Accum. depreciation
Total assets

17 290 000
112 000
1 400 000
15 442 000
3 360 000
1 344 000
2 016 000

Dr
($000)

Cr
($000)

(b)4 620 000

(a)112 000
(a)1 400 000
(a)180 600
(b)3 990 000
(a)133 000
(b)252 000
(b)302 400

(a)302 400

(b)75 600
3 010 000
(1 470 000)
3 556 000
9 450 000
2 940 000
15 946 000
11 634 000
1 960 000
29 540 000
7 280 000
3 290 000
2 730 000
9 660 000
19 740 000
(13 160 000)
4 220 000

(a)1 008 000

(a)515 200

________
6 445 600

________
6 445 600

Consolidated
statements
($000)

21 910 000
(180 600)
(19 432 000)
(133 000)
2 164 400
(1 596 000)
.
568 400
(75 600)
492 800
4 018 000
1 470 000
3 040 800
9 450 000
3 455 200
15 946 000
11 634 000
1 960 000
29 540 000
7 280 000
3 290 000
2 730 000
9 660 000
19 740 000
(13 160 000)
29 540 000

(c) Preparation of consolidated balance sheet, consolidated income statement, and a note to the consolidated financial statements
reconciling opening and closing retained earnings
Consolidated income statement of Mac Ltd and its subsidiaries
for the year ended 30 June 2009
$
Sales 21 910 000
Loss on sale of subsidiary
Impairment loss-goodwill
Expenses
Profit before tax
Income tax expense
Profit after income tax expense
Profit after income tax attributable to minority interest
Profit after income tax attributable to parent entity interest

(180 600)
(133 000)
(19 432 000)
2 164 400
(1 596 000)
568 400
75 600
492 800

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Consolidated balance sheet of Mac Ltd and its subsidiary

as at 30 June 2009
Parent
entity
interest
$
Current assets
Cash
Accounts receivable
Inventory
Non-current assets
Land
Buildings
Accumulated depreciation
Total assets

Minority
interest
$

Consolidated
$
7 280 000
3 290 000
2 730 000
9 660 000
19 740 000
(13 160 000)
29 540 000

Non-current liabilities
Mortgage loan
Deferred tax liability
Total liabilities

11 634 000
1 960 000
13 594 000

Shareholders equity
Retained earnings
Share capital
Revaluation reserve
Total shareholders equity
Total equities

3 040 800
9 450 000
3 455 200
15 946 000
29 540 000

Notes to and forming part of the consolidated accounts

$
Note x: Retained earnings
Retained earnings - 1 July 2008
Profit after income tax attributable to Mac Ltd
Interim dividend
Retained earnings - 30 June 2009

4 018 000
492 800
(1 470 000)
3 040 800

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3215