Question

Co. Pro acquired 30% of Co. Cee with consideration of $3,000,000 on 1 January 20×1.  As of this date, the Share Capital and Retained Earnings of Co. Cees were $1,000,000 and $7,600,000 respectively and the fair value of an Intangible Asset not recognized in the books of Co. Cee was estimated to be $450,000. The Intangible Asset had an indefinite useful life.  The fair values were close to the book values for other assets and liabilities of Co. Cee on 1 January 20×1.

Co. Pro acquired 60% of Co. Aye with consideration of $9,000,000 on 1 January 20×2.  As of this date, the Share Capital and Retained Earnings of Co. Aye were $5,200,000 and $8,500,000 respectively and the fair values and book values of Property, Plant & Equipment were $8,000,000 and $8,600,000 respectively, with estimated remaining useful lives of 4 years and no residual values.  The fair values were close to the book values for other assets and liabilities of Co. Aye on 1 January 20×2.  The fair value of Non-controlling Interest in Co. Aye on 1 January 20×2 was $6,000,000.

Co. Pro acquired 90% of Co. Bee on 1 January 20×3 with consideration of $14,000,000.  As at this date, the fair value of Non-controlling interest in Co. Bee was $1,400,000 and the fair value and book value of Inventories of Co. Bee inventory were $1,400,000 and $1,600,000 respectively.  All the Inventories that Co. Bee had as at 1 January 20×3 were sold to external parties in 20×3.  The fair values were close to the book values for other assets and liabilities of Co. Bee on 1 January 20×3.

Co. Bee acquired 70% of Co. Dee on 31 December 20×3 with consideration of $800,000.  As of this date, the fair value of Accounts Receivable was $200,000. The fair values were close to the book values for other assets and liabilities of Co. Dee on 31 December 20×3.  As the acquisition of Co. Dee occurred on 31 December 20×3, Co. Bee was not entitled to any share of profits and dividends in Co. Dee for the financial year 20×3.  The fair value of non-controlling interests in Co. Dee on 31 December 20×3 was $300,000.