Consolidation

Following are the statement of profit or loss for Oracle and Java for the year ending 31 March 2016. 

Following are the statement of profit or loss for Pizam and Plutka for the year ending 31 December 2016. 
 

On 1 October 20X0, Paladin secured a majority equity shareholding in Saracen on the following terms. 

An immediate payment of $4 per share on 1 October 20X0; and a further amount deferred until 1 October 20X1 of $5.4 million.

The immediate payment has been recorded in Paladin's financial statements, but the deferred payment has not been recorded. Paladin's cost of capital is 8% per annum, giving the deferred payment a current cost at 1 October 20X0 of $5 million.

On 1 January 20X4, Plastik acquired 80% of the equity share capital of Subtrak. The consideration was satisfied by a share exchange of two shares in Plastik for every three acquired shares in Subtrak. At the date of acquisition, shares in Plastik and Subtrak had a market value of $3 and $2.50 each respectively. Plastik will also pay cash consideration of 27.5 cents on 1 January 20X5 for each acquired share in Subtrak. Plastik has a cost of capital of 10% per annum. None of the consideration has been recorded by Plastik.

On 1 January 20X2, Viagem acquired 90% of the equity share capital of Greca in a share exchange in which Viagem issued two new shares for every three shares it acquired in Greca.  Additionally, on 31 December 20X2, Viagem will pay the shareholders of Greca $1.76 per share acquired.  Viagem's cost of capital is 10% per annum.

At the date of acquisition, shares in Viagem and Greca had a stock market value of $6.50 and $2.50 each respectively.

STATEMENTS OF PROFIT OR LOSS FOR THE YEAR ENDED 30 SEPTEMBER 20X2 

Highveldt, a public listed company, acquired 75% of Samson's ordinary shares on 1 April 20X4. Highveldt paid an immediate $3·50 per share in cash and agreed to pay a further amount of $108 million on 1 April 20X5. Highveldt's cost of capital is 8% per annum. Highveldt has only recorded the cash consideration of $3·50 per share. 

The summarized statements of financial position of the two companies at 31 March 20X5 are shown below:

On 1 April 20X8, Pedantic acquired 60% of the equity share capital of Sophistic in a share exchange of two shares in Pedantic for three shares in Sophistic. At that date the retained earnings of Sophistic were $5 million. The issue of shares has not yet been recorded by Pedantic. At the date of acquisition shares in Pedantic had a market value of $6 each. Below are the summarized draft statements of financial position of both companies.