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 - Profit before tax 830 630
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 -
Profit before tax 830 630
Income tax expenses (250) (180)
Profit for the year 580 450
Additional Information:
1. HIM acquired 80% of the ordinary share capital of a foreign entity, HER, on 1 January 2021 for Crowns 13 984 000. At the date of acquisition the net assets of HER had a fair value of Crowns 15 800 000. The group policy is to value non-
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controlling interest at fair value at the date of acquisition. The fair value of the non-controlling at the date of acquisition was Crowns 3 496 000. The fair value adjustments related to non-
2. The relevant exchange rates were as follows:
1 January 2021 AR/Crowns 1.61 (AR1 = Crowns 1.61)
31 December 2021 AR/Crowns 1.52 (AR1 = Crowns 1.52)
Average rate 2021 AR/Crowns 1.58 (AR1 = Crowns 1.58)
Required:
a) Calculate the translation gain or loss for the HIM Group for the year ended 31 December 2021. (5)
b) Prepare the consolidated statement of comprehensive income for the HIM Group for the yea ended 31 December 2021.
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