(Note that figures in the above table are in 000’s – thousands)

The following information is also available:

1. On 1^st January 2021, the acquisition date, the fair value of the tangible non-current assets of Subsidiary was $100 000 more than their book value and which had a remaining useful life of 10 years. This revaluation has not been included in Subsidiary’s financial statements.
2. The fair value of all other assets and liabilities at the acquisition date was equal to book value. The retained earnings of Subsidiary at that date were $60 000.

• The group policy is to depreciate tangible assets to Nil using straight line method.

1. The consideration for the acquisition was agreed and paid as follows: N$ 280 843 payables on 01 January 2021 and another N$ 200 000 payable for the next five years starting 01 January 2022. Only the initial payment has been recorded in the books of Parent.
2. No further share or debenture issues have been made by Subsidiary since the acquisition date.
3. The share prices of Subsidiary were trading at 80c and 85c as of 01 January 2021 and 31 December 2021 respectively.

• Goodwill has not been impaired during the year ended 31 December 2021.
• The pretax rate (cost of capital) is 10%.

1. Ignore the effects of deferred tax

Required

1. Calculate the amount of goodwill arising on the acquisition of Subsidiary. It is the Parent group policy to use the fair value method in calculating goodwill (10 marks)

1. Prepare the Consolidated statement of financial position as at 31st December 2021 for Parent and its subsidiaries as per IFRS 10.                                                             (16 marks)

IFRS 10 outlines circumstances that a holding company (parent) may be exempted to prepare consolidated financial statements. Describe in sufficient detail the exceptions to the requirement to present consolidated financial statements.                           (4 marks