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EA1: Recognize share of Post-Acq RE

Investment in Amber
Opening RE
RE of Amber as at 1 Jan 20x6
RE of Amber on Acq date
Change in RE
Share of As change in RE
EA2: Adjustment for litigation loss (After Tax)
Investment in A (180k) * 0.8 * 0.3
Opening RE

54k
54k
850k
670k
180k
54k

43.2k
43.2k

EA3: Adjustment for unrealized profit (After Tax)


Opening RE (0.6*25k) * 0.8 * 0.3
3.6k
Investment in A

EA6: Reclassify Revaluation reserves


Investment in A
Share of current revaluation reserves
Opening revaluation reserves

1343k
40k
16k
10k
0.96k
1409.96k
422.99k

12k
3k
15k

Retained Earnings Check (Analytical Approach)


Retained Earnings as at 31 Dec 20x6
Prism Co
Pshare of unrealized profit (Downstream)
0.1* (78k 72k) * (0.8 / 0.9)
Ps share of Silver Co (1615.4k 520k) * 0.9
Ps share of Amber Co (2053k 670k) * 0.3
Silver Co
Ps cumulative dep of FA (250k*4/20) * 0.8 * 0.9
Ps share of unrealized profit in intangible
(300k -252k) * (8/9yrs) * 0.8 * 0.9
Amber Co
Ps share of unrealized profit in Inv in Amber
[(0.1 * 75k) 8.8k] * 0.8 * 0.3
Ps share of FV adjustment of litigation loss
(250k) * 0.8 * 0.3
Retained Earnings as at 31 Dec 20x6

Investment in Amber
BV of A at Acq
1690k
Less Provision (250k* 0.8) (200k)
FV of A at Acq
1490k
Goodwill implicit in Inv of Amber

3113k
(1.04k)
3111.96k
933.59k

860k

(447k)
413k

Investment in Amber, as at 31 Dec 20x6

1346.59k

Balance of Investment in Associate (Listing Approach)


Investment in A, at cost
EA1: Recognize share of Post-Acq RE
EA2: Adj for litigation loss (After Tax)
EA3: Adj for unrealized profit (After Tax)
EA4: Reclassify div income as a reduction in Inv
EA5: Recognize share of current profit after tax of A
EA6: Reclassify Revaluation reserves

860k
54k
43.2k
(3.6k)
(42k)
422.99k
12k

Investment in Amber, as at 31 Dec 20x6

1346.59k

3.6k

EA4: Reclassify dividend income as a reduction in Investment


Dividend income (140k) * 0.3
42k
Investment in A
42k
EA5: Recognize share of current profit after tax of Amber
Investment in A
Share of Profit of A
PAT of Amber
Add back Gain from settlement of litigation (50k) * 0.8
Add back litigation expense after tax (20k) * 0.8
Add realized profit in Inventory Transfer after tax
(25k * 0.5) * 0.8
Add back impairment expense after tax (1.2k) * 0.8
Adjusted profit
Share of Adj. PAT of Amber

Balance of Investment in Associate (Analytical Approach)


BV of SH Equity of Amber Co
Adj for unrealized profit in inventory transfer (Aft Tax)
[(0.1 * 75k) 8.8k] * 0.8
Total value of SH Equity of Amber
Share of Ambers NIA as at 31 Dec 20x6

2050k
0.533k
985.68k
414.9k

(36k)
(30.72k)

(0.312k)
60k

3444k

Retained Earnings Check (Listing Approach)


Retained Earnings as at 31 Dec 20x6
Prism Co
Silver Co

2050k
1615.4k

CJE1 Elimination of Investment in Silver Co


CJE2a: Adj. for Higher Dep of Fixed Asset
CJE2b: Current depreciation expense
CJE3a: Tax effect of CJE2a
CJE3b: Tax effect of CJE2b
CJE4: Adj for unrealized profit in software
CJE5: Tax effect of CJE4
CJE6: Adjustment for excess amortization
CJE7: Tax Effect of CJE6
CJE8: Adjustment for impairment loss
CJE9: Tax effect of CJE8
CJE10: Adjustment for unrealized loss
CJE11: Tax effect of CJE10
CJE12: Adjustment for realized loss
CJE 13: Tax effect of CJE12
CJE14: Eliminate Dividends (100k 90k)
CJE15: Eliminate Interco Loans
CJE16: Eliminate Share of Post-Acq RE to NCI
CJE17: Eliminate Share of current income to NCI

(520k)
(33.75k)
(12.5k)
6.75k
2.5k
(63k)
12.6k
6.3k
(1.26k)
13.5k
(2.7k)
6k
(1.2k)
(5.333k)
1.067k
10k
NA
(20k)
(98.97k)

EA1: Recognize share of Post-Acq RE


EA2: Adj for litigation loss (After Tax)
EA3: Adj for unrealized profit (After Tax)
EA4: Reclassify div income as a reduction in Inv
EA5: Recognize share of current profit after tax of A

54k
43.2k
(3.6k)
(42k)
422.988k

Retained Earnings as at 31 Dec 20x6

3444k

CJE1: Elimination of investment in Silver


Share Capital
620k
Retained Earnings
520k
Goodwill (Balance)
660k
Fixed Asset
250k
DTL
50k
Investment in Silver Co
1820k
NCI
180k
CJE2: Adj. for Higher Dep of Fixed Asset
Opening RE
33.75k
NCI
3.75k
Depreciation expense
12.5k
Accumulated depreciation
50k
CJE3: Tax effect of CJE2
DTL | Opening RE, NCI, Tax Exp
(10k = 6.75k, 0.75k, 2.5k)
CJE4: Adj for unrealized profit in transfer of software (Upstream)
Opening RE
63k
NCI
7k
Intangible asset (Software)
70k
CJE5: Tax effect of CJE4
DTA | Opening RE, NCI
(14k = 12.6k, 1.4k)
CJE6: Adjustment for excess amortization
Accumulated amortization (Software)
7k
Opening RE
6.3k
NCI
0.7k
CJE7: Tax Effect of CJE6
Opening RE, NCI | DTA (1.26k, 0.14k = 1.4k)
CJE8: Adjustment for impairment loss
Acc. amortization (Software) (Note 1)
15k
Opening RE
13.5k
NCI
1.5k
CJE9: Tax effect of CJE8
Opening RE, NCI | DTA
(2.7k, 0.3k = 3k)
CJE10: Adjustment for unrealized loss on excess inventory
(Downstream)
Inventory
6k
Opening RE
6k
CJE11: Tax effect of CJE10
Opening RE | DTL
(1.2k = 1.2k)
CJE12: Adjustment for realized loss
Impairment expense (6000 * 0.8/0.9)
5.33k
Inventory
5.33k
CJE 13: Tax effect of CJE12
DTL | Tax expense
(1.067k = 1.067k)
CJE 14: Eliminate dividends declared by S
Dividend income
90k
NCI
10k
Dividend declared
100k
CJE15: Eliminate Intercompany loans
AP to Silver Co
150k
AR from Prism Co
150k
CJE16: Share of Post-Acq RE to NCI
Opening RE
20k
NCI
20k
RE at date of acquisition
520k
RE at 1 Jan 20x6
720k
Change in RE
200k
NCIs share
20k
CJE17: Share of current income to NCI
Income to NCI
98.97k
NCI
98.97k
NPAT of Silver Co
Less Excess Dep of FA
Add Tax on Removal of Excess Dep
Add Amortization of IA (Software)
Less Tax on Reduced Amortization
Adjusted NPAT

995.4k
(12.5k)
2.5k
5.33k
(1.06k)
989.7k

NCI Balance (Analytical Check)


Book Value of SH Equity at 31 Dec 20x6
Adj. for remaining un-Dep FV of FA (250k*16/20) * 0.8
Adj. for unamortized balance of IA (Software)
(300k-0.9*280k) * 8/9 (years) * 0.8 (After Tax)
Adj. SH Equity
NCIs share of Adj. Equity

2235.4k
160k
(34.13k)
2361.3k
236.13k

FV of NCI @ Acq.
FV of INA by NCI (0.1*1140k+0.1*250k*0.8)
(0.1*SH Equity @Acq + 0.1* After tax FV changes)
NCIs Goodwill (FV of NCI FV of INA of NCI)

180k
134k

NCIs balance at 31 Dec 20x6

282.13k

NCI Balance (Listing Check)


CJE1 Elimination of Investment in Silver Co
CJE2: Adj. for Higher Dep of Fixed Asset
CJE3: Tax effect of CJE2
CJE4: Adj for unrealized profit in software
CJE5: Tax effect of CJE4
CJE6: Adjustment for excess amortization
CJE7: Tax Effect of CJE6
CJE8: Adjustment for impairment loss
CJE9: Tax effect of CJE8
CJE10-CJE13: Downstream Transaction
CJE14: Eliminate Dividends
CJE15: Eliminate Interco Loans
CJE16: Share of Post-Acq RE to NCI
CJE17: Share of current income to NCI

180k
(3.75k)
0.75k
(7k)
1.4k
0.7k
(0.14k)
1.5k
(0.3k)
NA
(10k)
NA
20k
98.97k

NCIs balance at 31 Dec 20x6

282.13k

Note 1
CA
(FV Cost) / Value
LCNRV
Impairment
Amortization

Legal
315k
300k
300k
15k
NA

Group
252k
300k
252k
0k
48k/10 yrs

46k