F7 Group Accounts: Comprehensive Example

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F7 Group Accounts: Comprehensive Example

Agne acquired 72% of the equity shares of Dace on 30 June 2009 for $250,000.

On 31 August 2009, the Statements of Financial Position were:

1. At the date of acquisition, some of Dace’s inventory had a fair value $16,000 in excess of its carrying value. All had been sold before the year end.
2. On 31 July 2009, Dace had sold an item of property, plant and equipment to Agne realising a profit on sale of $20,000. Agne was depreciating this item over its remaining useful life of 4 years. It is group policy to charge a full year’s depreciation in the year of purchase, and none in the year of sale.
3. On 29 August, Agne had despatched goods to Dace at a transfer value of $26,000. Agne sells goods at a mark up of 30%. Dace had sold a quarter of these goods by the Statement of Financial Position date.
4. The current accounts did not reconcile at the year end because Dace had sent a payment of $5,000 to Agne, but Agne only received it on 3 September 2009. Before any necessary adjustment, the intra group balance in Dace’s records showed an amount owing to Agne of $12,000.
5. Goodwill is impaired by 25%.
6. Both entities have declared but not yet accounted for a dividend of 5c per $1 share.
7. The directors valued the nci at $87,667 at date of acquisition

Prepare a Consolidated Statement of Financial Position for the Agne Group as at 31 August 2009.


  1. avatar says

    Thanks for the nice lecture, dear tutor!
    What I find confusing is the fact that 4 000 post acq is divided again by 10 and 2 months. I consider they relate to
    the 2 months post acq period and there is no need to apportion them again on a time basis.
    I understand FV adjustment of 20 000 and 16 000.
    Thank you!

  2. avatar says

    Good Morning

    You indicated that the new thinking is that we cannot assume that dividends accrued proportionately/evenly throughout the year and the logic seems sound however in the question above we apportioned the earnings pre and pos acqui so we new how the profits occured. Why then didnt we apportion base on a percentage?

    Im refering to the dividends receivable W3

    • Avatar of MikeLittle says

      @EDR, Hi

      We HAVE to apportion the profits for the year in a mid-year acquisition situation and, unless directed otherwise, we sensibly will do it on a time basis.

      However, ( apparently! ) that is not sufficient justification to treat the dividends as accruing on the same basis. It USED to be the case that dividends were treated as accruing on an even basis over time – but that principle has changed.

      Whether you understand / accept the thinking behind the change …. it really doesn’t matter – sorry! Just accept it! I’ve had to!

    • Avatar of MikeLittle says

      @haidernchd, It was. The 40,000 brought forward was entirely pre-acquisition, so not time apportioned. The 24,000 this year is time-apportioned in the workings – 19,333 pre-acquisition and 4,667 post-acquisition

  3. avatar says


    Have to say a BIG thankyou – your explainations and especially the W1/W2/W3/W4 and PUPs breakdown of the calculations make so much more sense to me than the way my lecturer taught me. I feel a lot more confident tackling consolidate statements now.


      • avatar says


        My exam is actually tmw morning – Im finishing off my degree through the Uni of South Africa, and our final paper on Consol FS (ACN3704) is more similiar to P2 than F7 really iro of group complexity – wish I had started on OpenTutution sooner instead of battling on with the explainations giving by UNISA. But nonetheless its great when those pieces of the puzzle finally make sense and you go “aahh now i get it” :)

        Many thanks again to great online lectures, you do a really great job!

  4. Avatar of zubang5933 says

    When we calculate proft for the year in goodwill,why do we need to subtract “on TNCA tranfer” 20000 in order to get ‘normal profit’,isn’t Dace had sold the item and realise the profit on 31 July 2009(after the date of acquisation,30June2009) and thus is not related to fair value of SNA@DOA?

  5. avatar says

    the lecturer started his answer from the last paragraph, my question is : if he started from the 1st paragraph will he get the same result or different one.
    i tried it myself but became a bit confused.

    • Avatar of MikeLittle says

      @niko123, No, the answer will be the same! Most times, the paragraphs in a question are not interdependent. That is, you can prepare a working for each paragraph in isolation, and then fasten your whole answer together. I tend to start with the last paragraphs because they tend to be the most straightforward and require the least effort / thought

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