QUESTION TWO(30 MARKS)
Croc Ltd is a subsidiary of Able with non-controlling interest of 15%. Its parent company is Able Ltd. Able Ltd also controls 65% of Rovaldo Ltd. Rovaldo Ltd controls 75% of Apple Ltd. Able ltd controls 35% of Vodacom and has significant influence. Croc Ltd controls 50% of white’s shareholdings using equity method for joint ventures.
Amounts are in millions of Rands
Required: fill in the table (10)
Calculate the amount in the group statement in terms of
1) Land
2) Profit
3) Non-controlling interest
Equity holding of the parent (20)
1) Land:
- Land of Croc Ltd: The amount will be reported in the group statement as 100.
- Land of Rovaldo Ltd: The amount will be reported in the group statement as 0, as Rovaldo Ltd is not a majority-owned subsidiary.
- Land of Apple Ltd: The amount will be reported in the group statement as 0, as Apple Ltd is not a majority-owned subsidiary.
- Land of Vodacom: The amount will be reported in the group statement as 0, as Vodacom is an associate and not consolidated.
2) Profit:
- Profit of Croc Ltd: The amount will be reported in the group statement as 50.
- Profit of Rovaldo Ltd: The amount will be reported in the group statement as 0, as Rovaldo Ltd is not a majority-owned subsidiary.
- Profit of Apple Ltd: The amount will be reported in the group statement as 0, as Apple Ltd is not a majority-owned subsidiary.
- Profit of Vodacom: The amount will be reported in the group statement as 0, as Vodacom is an associate and not consolidated.
- Profit of joint ventures: The amount will be reported in the group statement as 25 (50% of White's shareholdings controlled by Croc Ltd).
3) Non-controlling interest:
- Non-controlling interest in Croc Ltd: The amount will be reported in the group statement as 15 (15% of Croc Ltd's equity).
- Non-controlling interest in Rovaldo Ltd: The amount will be reported in the group statement as 0, as Rovaldo Ltd is not consolidated.
- Non-controlling interest in Apple Ltd: The amount will be reported in the group statement as 0, as Apple Ltd is not consolidated.
- Non-controlling interest in Vodacom: The amount will be reported in the group statement as 0, as Vodacom is an associate and not consolidated.