1 Groups and consolidation: an overview

 
439 
3
 Revaluation 
surplus 
$ 
Hinge Co 
7,000 
Group share of post-acquisition revaluation surplus: Singe Co 
– 
7,000 
4 
NCI at reporting date 
$ 
Fair value of NCI at acquisition date 
7,000 
NCI share of post-acquisition retained earnings (20% 

18,000)
3,600 
NCI 
1 
10,600 
 
 
6
Summary: consolidated statement of financial position 
Purpose 
To show the net assets which parent controls and the ownership of those assets 
Net assets 
Always 100% parent plus 100% subsidiary 
Share capital 
Parent only 
Reason 
Simply reporting to the parent company's shareholders in another form 
Retained 
earnings 
100% parent plus group share of post-acquisition retained earnings of subsidiary less 
consolidation adjustments 
Reason 
To show the extent to which the group actually owns total assets less liabilities 
Non-controlling 
interest 
Fair value at acquisition plus share of post-acquisition retained earnings and other 
resources 
Reason 
To show the equity in a subsidiary not attributable to the parent 
 EXAM FOCUS POINT 

Your FFA exam is a CBE, so you will not have to set out a full pro-forma as you would in a paper 
based exam. 

You will be given the financial statements and additional information as above and you will then 
complete the consolidated statements by way of separate tasks. 

For each of these tasks, such as goodwill on acquisition or NCI, you will be given a pro-forma to 
complete. 

You will not be required to show workings. 

However, learning to complete a full statement as above with correct workings is very good 
practice both for your exam and for later papers. 
BPP Tutor Toolkit Copy

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