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
Able LTD:
land: R 1500
Profit R1150
Croc:
Land R400
Profit R120
Rovaldo
Land R1300
Profit 1125
Apple
Land R200
Profit 180
Vodacome
land R650
Profit R 400
White
Land R 100
Profit R250
Required fill in the table:
1. Name
2. nature of investee
3. accounting basis (GAAP)
Calculate the amount in the group statement in terms of:
1. land
2. Profit
3.Non-controlling interest
4. equity holding of the parent
Name | Nature of Investee | Accounting Basis (GAAP)
Able Ltd | Parent Company | IFRS
Croc Ltd | Subsidiary | IFRS
Rovaldo Ltd | Subsidiary | IFRS
Apple Ltd | Subsidiary | IFRS
Vodacom | Associate | IFRS
White | Joint Venture | Equity Method
Amounts in the Group Statement:
Land:
1. Able Ltd: R1500 million
2. Croc Ltd: R400 million
3. Rovaldo Ltd: R1300 million
4. Apple Ltd: R200 million
5. Vodacom: N/A (Vodacom's land is not mentioned)
6. White: R100 million
Profit:
1. Able Ltd: R1150 million
2. Croc Ltd: R120 million
3. Rovaldo Ltd: R1125 million
4. Apple Ltd: R180 million
5. Vodacom: R400 million
6. White: R250 million
Non-controlling Interest:
1. Croc Ltd: 15% of Croc's Profit (15% of R120 million)
2. Rovaldo Ltd: 25% of Rovaldo's Profit (25% of R1125 million)
3. Apple Ltd: 25% of Apple's Profit (25% of R180 million)
4. Vodacom: 25% of Vodacom's Profit (25% of R400 million)
Note: Non-controlling interest for Able Ltd and White is not applicable as they are the parent and joint venture partner, respectively.
Equity Holding of the Parent:
1. Able Ltd: 100% of Croc's Profit (100% of R120 million)
65% of Rovaldo's Profit (65% of R1125 million)
75% of Apple's Profit (75% of R180 million)
35% of Vodacom's Profit (35% of R400 million)
Note: Equity holding for Able Ltd in White is not applicable as it is a joint venture, and equity is held using the equity method.