Chapter 5: Changes in group structure

Chapter 5, Example 1. Jeremy acquired 40% of the equity interest of David for $40 million several years ago. On 1 January 2015, Jeremy acquired an additional 35% for $45 million when the fair value of the identifiable net assets was $105 million. The investment was classified as {{old_category|fair value through profit or loss|entity}}. The fair value of the non-controlling interest on 1 January 2015 was $32 million and the fair value of the original 40% holding was $52 million.

Chapter 5, Example 5 - Group SFP. Reilly, a public limited company, operates in the manufacturing sector. The draft statements of financial position at 31 December 2015 are as follows:

• Reilly acquired a 60% holding in the equity shares of Hulme on 1 January 2014 for a cash consideration of $75 million, when the retained earnings were $25 million. The fair value of the non-controlling interest was $40 million.
• On 31 December 2015, Reilly acquired a further 10% of the equity shares of Hulme for a cash consideration of $15 million. At this date the NCI was $56m.
• Reilly acquired 90% of the equity shares of Jones on 1 January 2015 for a cash consideration of $120 million when the retained earnings were $35 million. The fair value of the non-controlling interest was $13 million.
• On 31 December 2015, Reilly disposed of 20% of the equity shares in Jones for a cash consideration of $35 million. At this date the NCI was $14m.
• The group policy is to value the non-controlling interest at acquisition using the fair value method.

All figures are in $m.