{"id":70216,"date":"2021-11-03T04:33:57","date_gmt":"2021-11-03T04:33:57","guid":{"rendered":"https:\/\/papersspot.com\/blog\/2021\/11\/03\/translation-gain-or-loss-and-consolidated-statement\/"},"modified":"2021-11-03T04:33:57","modified_gmt":"2021-11-03T04:33:57","slug":"translation-gain-or-loss-and-consolidated-statement","status":"publish","type":"post","link":"https:\/\/papersspot.com\/blog\/2021\/11\/03\/translation-gain-or-loss-and-consolidated-statement\/","title":{"rendered":"Translation gain or loss and consolidated statement"},"content":{"rendered":"<p>The income statements for HIM and HER for the year ended 31 December 2021 are <br \/>shown below: <br \/>HIM HER <br \/>AR000 Crowns000 <br \/>Revenue 5 200 4 500 <br \/>Cost of sales (3 200) (3 000) <br \/>Gross profit 2 000 1 500 <br \/>Distribution costs (800) (420) <br \/>Administrative expenses (450) (450) <br \/>Other income 80 &#8211; <br \/>Profit before tax 830 630 <br \/>Income tax expenses (250) (180) <br \/>Profit for the year 580 450 <br \/>Additional Information: <br \/>1. HIM acquired 80% of the ordinary share capital of a foreign entity, HER, on 1 <br \/>January 2021 for Crowns 13 984 000. At the date of acquisition the net assets of <br \/>HER had a fair value of Crowns 15 800 000. The group policy is to value non ontrolling interest at fair value at the date of acquisition. The fair value of the <br \/>non-controlling at the date of acquisition was Crowns 3 496 000. The fair value <br \/>adjustments related to non-depreciable land. At 31 December 2021 the goodwill <br \/>that arose on the acquisition of HER was impaired by 20%. Impairment is <br \/>translated at the average rate and is charged to group administrative expenses. <br \/>2. The relevant exchange rates were as follows: <br \/>1 January 2021 AR\/Crowns 1.61 (AR1 = Crowns 1.61) <br \/>31 December 2021 AR\/Crowns 1.52 (AR1 = Crowns 1.52) <br \/>Average rate 2021 AR\/Crowns 1.58 (AR1 = Crowns 1.58) <br \/>Required: <br \/>a) Calculate the translation gain or loss for the HIM Group for the year ended 31 <br \/>December 2021. (5) <br \/>b) Prepare the consolidated statement of comprehensive income for the HIM Group <br \/>for the yea ended 31 December 2021. (5) <\/p>\n","protected":false},"excerpt":{"rendered":"<p>The income statements for HIM and HER for the year ended 31 December 2021 are shown below: HIM HER AR000 Crowns000 Revenue 5 200 4 500 Cost of sales (3 200) (3 000) Gross profit 2 000 1 500 Distribution costs (800) (420) Administrative expenses (450) (450) Other income 80 &#8211; Profit before tax 830 [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[16],"class_list":["post-70216","post","type-post","status-publish","format-standard","hentry","category-research-paper-writing","tag-accounting"],"_links":{"self":[{"href":"https:\/\/papersspot.com\/blog\/wp-json\/wp\/v2\/posts\/70216","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/papersspot.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/papersspot.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/papersspot.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/papersspot.com\/blog\/wp-json\/wp\/v2\/comments?post=70216"}],"version-history":[{"count":0,"href":"https:\/\/papersspot.com\/blog\/wp-json\/wp\/v2\/posts\/70216\/revisions"}],"wp:attachment":[{"href":"https:\/\/papersspot.com\/blog\/wp-json\/wp\/v2\/media?parent=70216"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/papersspot.com\/blog\/wp-json\/wp\/v2\/categories?post=70216"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/papersspot.com\/blog\/wp-json\/wp\/v2\/tags?post=70216"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}