Task 1- 1st part requires you to construct a set of consolidated financial statements
Below (Balance Sheets at 31/12/202X) are the financial statements for Kovach and Freedom for the year ended 31/12/20X0. Kovach acquired an 80% share in Freedom on 31/12/20X0. All values stated in the statements below are considered to be the fair values at the date of acquisition. Non-controlling interests are to be accounted for using the proportionate approach.
Immediately following the acquisition on 31/12/20X0 Kovach decided to write off as an impairment charge 25% of the goodwill on the acquisition of Freedom and this has not yet been accounted for in the financial statements below.
You are required to construct the Group Consolidated Statement of Financial Position and Group Consolidated Statement of Comprehensive Income for the Kovach Group following the acquisition on the date 31/12/X0, taking into the account the information provided above.
- Use 25-30 academic sources
- 1,500 words – 2d part requires you to evaluate critically certain aspects of the consolidation process.
Kovach has decided to write off 25% of the goodwill upon the acquisition of Freedom in task 1 above. The process of asset impairment involves several key decisions in relation to measurement and valuation within financial reporting. You are required to critically evaluate the concept of asset impairment in terms of whether you consider this process to provide information that is useful to shareholders and the wider stakeholder community in the context of published financial information
- Record financial transactions using double entry bookkeeping and extract trial balance
- Prepare the full consolidated statements for a range of different types of entities, including the preparation of full consolidated statements of a single company
- Explain contemporary developments in financial and non-financial reporting