Chapter 13 Change in Group Structure

LEARNING OBJECTIVES

1. Apply the principles of accounting for step acquisition.

2. Apply the principles of accounting for partial and full disposals.
3. Explain and illustrate the basic principles relating to the disposal of group companies.
4. Discuss and illustrate the treatment of goodwill and NCI (in relation to step
acquisition and disposal of group companies.)

C h a n g e in
G ro u p S tru c tu re

M id -y e a r S te p D isp o sa l
A c q u isitio n A c q u isitio n

A c q u ire F u rth e r E n tire P a rtia l S u b s id ia ry

S u b s id ia ry P u rc h a se D isp o sa l D isp o sa l A c q u ire d fo r
in S ta g es S u b seq u en t
D isp o sa l

S t il l in B ecom e B ecom e
S u b s id ia ry A sso c ia te T ra de
In v e stm e n t

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1. Acquisition of a Subsidiary during the Year

1.1 Remember that a parent entity acquires control of a subsidiary from the date that it
obtains a majority shareholding. If this happens mid-year, then it will be necessary to
pro-rata the results of the subsidiary for the year to identify the net assets at the date
of acquisition.

1.2 Example 1 – Mid-year acquisition

On 1 July 2011 H Ltd purchased 1,600,000 of 2,000,000 equity shares of $1 each in
S Ltd for $10,280,000. On the same date it also acquired 1,000,000 of S Ltd’s 10%
loan notes. At the date of acquisition the retained earnings of S Ltd were $6,150,000.
The summarized draft statement of comprehensive income for each company for the
year ended 31 March 2012 was as follows.

H S
$000 $000
Revenue 60,000 24,000
Cost of sales (42,000) (20,000)
Gross profit 18,000 4,000
Distribution costs (2,500) (50)
Administration expenses (3,500) (150)
Profit from operations 12,000 3,800
Interest received / (paid) 75 (200)
Profit before tax 12,075 3,600
Tax (3,000) (600)
Profit for the year 9,075 3,000

The following information is relevant:

1. The fair value of S Ltd’s assets at the date of acquisition were mostly equal to
their book values with the exception of plant, which was stated in the books at
$2,000,000 but had a fair value of $5,200,000. The remaining useful life of
the plant in question was four years at the date of acquisition. Depreciation is
charged to cost of sales and is time apportioned on a monthly basis.
2. During the post-acquisition period H Ltd sold S Ltd some goods for $12
million. The goods had originally cost $9 million. During the remaining
months of the year S Ltd sold $10 million (at cost to S Ltd) of these goods to
third parties for $13 million.

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3. Revenues and expenses should be deemed to accrue evenly throughout the
year.
4. H Ltd has a policy of valuing non-controlling interests using the full goodwill
method. The fair value of non-controlling interest at the date of acquisition
was $2,520,000.
5. The fair value of goodwill was impaired by $300,000 at the reporting date.

Required:

Prepare a consolidated income statement for H Group for the year to 31 March 2012.

Solution:
H S Adj. Group
(9/12)
$000 $000 $000 $000
Revenue 60,000 18,000 (12,000) 66,000
Cost of sales (42,000) (15,000) 12,000
URPS (W3) (500)
Depn. adj. (W2) (600) (46,100)
Gross profit 19,900
Distribution costs (2,500) (38) (2,538)
Administration exp. (3,500) (112)
Goodwill impairment
(W5) (300) (300)
Profit from operation 13,450
Interest received 75 75
Interest paid (150) (150)
Profit before tax 13,375
Tax (3,000) (450) (3,450)
Profit after tax 1,650 9,925

NCI (20% × 1,650) 330

Less: Share of goodwill
impairment (300 × 20%) (60)
270
Profit attributable to:
Equity holders of parent (bal. fig.) 9,655

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Non-controlling interest 270
9,925

W1 Shareholding
Group 80%
NCI 20%
100%

W2 Depreciation adjustment for the fair value

= $3,200,000 × 9/48
= $600,000

W3 Unrealised profit in inventory

= ($12m – $10m) × 3/12
= $500,000

W4 Net assets of subsidiary at acquisition date

$000
Equity capital 2,000
Retained earnings 6,150
8,150
Fair value adjustment (5,200 – 2,000) 3,200
11,350

W5 Goodwill
$000
Cost of investment 10,280
FV of NCI at acquisition 2,520
12,800
FV of net assets at acquisition (W4) (11,350)
Goodwill at acquisition 1,450
Impaired during year (300)
Unimpaired goodwill 1,150

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2. Step (Piecemeal) Acquisitions

2.1 Acquire subsidiary in stages

2.1.1 A step acquisition occurs when the parent entity acquires control over the
subsidiary in stages. This is achieved by buying blocks of shares at different times.

2.1.2 Accounting treatment

(a) Any pre-existing equity interest in an entity is accounted for according to:
(i) HKFRS 9 in the case of simple investments
(ii) HKAS 28 in the case of associates and joint ventures
(iii) HKFRS 11 in the case of joint arrangements
(b) At the date when equity interest is increased and control achieved:
(i) re-measure the previously held equity interest to fair value
(ii) recognize any resulting gain or loss in profit or loss
(iii) calculate goodwill and NCI on either a partial (i.e. proportionate) or
full (i.e. fair value) basis in accordance with HKFRS 3 (Revised). The
cost of acquiring control will be the fair value of the previously held
equity interest plus the cost of the most recent purchase of shares at
acquisition date.
(c) If there has been re-measurement of any previously held equity interest that
was recognized in other comprehensive income, any changes in value
recognized in earlier years are now reclassified from equity to profit or loss.

2.1.3 Example 2 – Step acquisition

H Ltd holds a 10% investment S Ltd at $24,000 in accordance with HKFRS 9. On 1
June 2012, it acquires a further 50% of S Ltd’s equity shares at a cost of $160,000.

On this date fair values are as follows:

 S Ltd’s net assets – $200,000
 The non-controlling interest – $100,000
 The 10% investment – $26,000

The NCI is to be valued using the full method.

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 How do you calculate the goodwill arising in S Ltd.
Solution:

W1 Group structure

60% (10% + 50%)

Due to step acquisition – revalue the investment – take gain or loss to income
statement – i.e. an increase in carrying value from $24,000 to $26,000.

Dr. ($) Cr. ($)

Investment 2,000
Profit on remeasurement 2,000

$
Cost of investment (26,000 + 160,000) 186,000
FV of NCI at acquisition 100,000
286,000
FV of net assets at acquisition (200,000)
Goodwill at acquisition 86,000

Question 1
The statement of financial position of two entities, H and S as at 31 December 2012 are as
follows:
H S
$000 $000
Investment 160
Sundry assets 350 250
510 250

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Equity share capital 200 100
Retained earnings 250 122
Liabilities 60 28
510 250

H acquired 40% of S on 31 December 2007 for $90,000. At this time the retained earnings of
S stood at $76,000. A further 20% of shares in S was acquired by H three years later for
$70,000. On this date, the fair value of the existing holding in S was $105,000. S’s retained
earnings were $100,000 on the second acquisition date, at which date the fair value of the
non-controlling interest was $90,000. It is group policy to value the non-controlling interest
on a full fair value basis.

Required:

Prepare the consolidated statement of financial position for the H Group as at 31 December
2012.

2.2 Further purchases by group after control obtained (decrease in NCI)

2.2.1 From the perspective of the group accounts where there is a purchase of more shares
in a subsidiary then, in essence, this is not an acquisition – it is a decrease in the non-
controlling interest.

2.2.2 Where there is a decrease in NCI

(a) There is no change in the goodwill asset.

(b) No gain or loss arises as this is a transaction within equity, i.e. with the NCI.
(c) A difference will arise that will be taken to equity and is determined in the
following proforma.

$
Cash paid X
Decrease in NCI (proportion decrease in NCI × NCI at date
of decrease) X
Difference to equity X

Dr. ($) Cr. ($)

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 NCI X
Equity (bal. fig.) (Dr./Cr.) X
Bank/Investment in subsidiary X

2.2.3 Example 3
H has owned 80% of S for many years.

H is considering acquiring more shares in S, which will decrease the NCI. The NCI
of S currently has a carrying value of $20,000, with the net assets and goodwill
having a value of $125,000 and $25,000 respectively.

H is considering the following two scenarios:

1. H could buy 20% of the S shares leaving no NCI for $25,000, or
2. H could buy 5% of the S shares for $4,000 leaving a 15% NCI.

Required:

Calculate the difference arising that will be taken to equity for each situation.

Solution:
1. Purchase of 20% of S shares
$
Cash paid 25,000
Decrease in NCI (20%/20% × 20,000) (20,000)
Decrease to equity 5,000

2. Purchase of 5% of S shares
$
Cash paid 4,000
Decrease in NCI (5%/20% × 20,000) (5,000)
Increase in equity 1,000

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2.2.4 Example 4
The statements of financial position of H and its subsidiary S as at 31 December
2012 are as follows:
H S
$000 $000
Investment in S Ltd 400 -
Net assets 600 550
1,000 550

Equity share capital 200 100

Retained earnings 800 450
1,000 550

H Ltd acquired its holding in S as follows:

Date Proportion Cost of S – retained
acquired investment earnings
$000 $000 $000
30 Sept. 2010 60 250 300
31 July 2011 20 150 400

Goodwill is calculated on the proportion of net assets method.

Required:

Prepare H Group statement of financial position as at 31 December 2011.

Solution:

W1 Group structure

60% (60% + 20%)

300
W2 Net assets
30.9.2010 31.7.2011
$000 $000
Equity capital 100 100
Reserves 300 400
400 500

W3 Goodwill
$000
Cost of investment (at acquisition date) 250
Less: Fair value of net assets (60% × 400,000 (W2)) (240)
Goodwill 10

W4 Step adjustment
At date of additional acquisition – 31.7.2011 $000
NCI before additional acquisition (40% × 500) 200
NCI after additional acquisition (20% × 500) (100)
Reduction in NCI 100
FV of consideration paid (150)
Loss to retained earnings (50)

W5 Group reserves
$000
H 800
S – [60% × (400 – 300)] 60
– [80% × (450 – 400)] 40
Step adjustment (W4) (50)
Group reserves 850

W6 NCI
$000
Share of net assets (20% × 550) 110

Consolidated statement of financial position as at 31 December 2012

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 $000
Goodwill (W3) 10
Net assets (600 + 550) 1,150
1,160

Equity capital 200

Retained earnings (W5) 850
1,050
Non-controlling interest (W6) 110
1,160

3. Disposal

3.1 Introduction

3.1.1 During the year, one entity may sell some or all of its shares in another entity. Possible
situations include:
(a) the disposal of all the shares held in the subsidiary
(b) the disposal of part of the shareholding, leaving a controlling interest after the
sale
(c) the disposal of part of the shareholding, leaving a residual holding after the
sale, which is regarded as an associate
(d) the disposal of part of the shareholding, leaving a residual holding after the
sale, which is regarded as a trade investment.
3.1.2 When a group disposes all or part of its interest in a subsidiary undertaking, this must
be reflected in the investing entity’s individual accounts and in the group accounts.

3.2 Investing entity’s accounts

(a) Gain to investing entity

3.2.1 In all of the above scenarios, the gain on disposal in the investing entity’s accounts is
calculated as follows:

$
Sales proceeds X

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 Carrying amount (usually cost) of shares sold (X)
X
Tax – amount or rate given in question (X)
Net gain to parent X

3.2.2 The gain would often be reported as an exceptional item; if so, it must be disclosed
separately on the face of the parent’s statement of comprehensive income after
operating profit.

3.3 Group accounts

3.3.1 In the group accounts the accounting for the sale of shares in a subsidiary will depend
on whether or not the transaction causes control to be lost, or whether after the sale
control is still maintained.

3.3.2 Accounting for the sale of shares in a subsidiary

(a) Where control is lost, there will be a gain or loss to the group which must be
included in the group income statement for the year.

Additionally, there will be derecognition of the assets and liabilities of the

subsidiary disposed of, together with elimination of goodwill and NCI from
the group accounts.

The income statement of the subsidiary will be consolidated up to the date

of disposal.
(b) Where control is maintained, there is no gain or loss to be recorded in the
group accounts.

Instead, the transaction is regarded as one between equity holders, with the
end result being an increase in NCI.

The group continues to recognize the goodwill, assets and liabilities of the
subsidiary at the year end, and consolidates the income statement of the
subsidiary for the year.

4. Group Accounts – Entire Disposal

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4.1 Example 5
H has held a 70% investment in S for two years. H is disposing of this investment.
Goodwill has been calculated using the full goodwill method. No goodwill has been
impaired. Details are:
$
Cost of investment 2,000
S – Fair value of net assets at acquisition 1,900
S – Fair value of the NCI at acquisition 800
Sale proceeds 3,000
S – Net assets at disposal 2,400

Required:

Calculate the profit or loss on disposal.

(a) In H’s individual accounts
(b) In the consolidated accounts

H is subject to tax at the rate of 25%.

Solution:

(a) Gain to H
$
Sale proceeds 3,000
Cost of shares sold (2,000)
Gain on disposal 1,000

Tax charge against H at 25% 250

(b) Consolidated accounts

$ $ $
Sale proceeds 3,000
Net assets at disposal 2,400
Unimpaired goodwill (W1) 900
Less: Carrying value of NCI at disposal date:
FV of NCI at acquisition 800
NCI % of post-acq. retained earnings:

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 [30% × (2,400 – 1,900)] 150 (950)
(2,350)
Gain to group before tax 650

Tax charge on gain made by H (as above) 250

W1 Goodwill
$
Cost of investment 2,000
FV of NCI at acquisition 800
2,800
FV of net asset at acquisition (1,900)
Goodwill 900

5. Group Accounts Disposal – Subsidiary to Associate

5.1 This situation is where the disposal results in the subsidiary becoming an associate,
e.g. 90% holding is reduced to a 40% holding.

5.2 Accounting for disposal – subsidiary to associate

(a) Consolidated statement of comprehensive income

(i) Pro rate the subsidiary’s results up to the date of disposal
 Consolidate the results up to the date of disposal
 Equity account for the results after the date of disposal
(ii) Include the group gain on part disposal
(b) Consolidated statement of financial position
(i) Equity account by reference to the year end holding, based on the fair
value of the associate holding at disposal date.

5.3 Example 6
H disposed of a 25% holding in S on 30 June 2012 for $125,000. A 70% holding in S
had been acquired five years prior to this. H uses the full goodwill method in
accordance with HKFRS 3 (revised). Goodwill was impaired and written off in full
prior to the year of disposal.

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 Details of S are as follows:
$
Net assets at disposal date 340,000
Fair value of a 45% holding at 30 June 2012 245,000

Required:

If the carrying value of NCI is $80,000 at the date of the share disposal, what gain on
disposal is reported in the H Group accounts for the year ended 31 December 2012?

Ignore

Solution:

H H

70% 45%

S S

Subsidiary (6 months) Associate (6 months)

Gain or loss to the group on disposal

$
Proceeds 125,000
FV of retained interest 245,000
30% NCI 80,000
450,000
100% Net assets at date of disposal (340,000)
Gain on disposal 110,000

Question 2
H has held a 60% investment S for several years, using the full goodwill method to value the

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NCI. Half of the goodwill has been impaired prior to the date of disposal of shares by H.
Details are as follows:
$000
Cost of investment 6,000
S – Fair value of net assets at acquisition 2,000
S – Fair value of a 40% investment at acquisition date 1,000
S – Net assets at disposal 3,000
S – FV of a 30% investment at disposal date 3,500

Required:
(a) Assuming a full disposal of the holding and proceeds of $10 million, calculate the
profit or loss arising:
(i) in H’s individual accounts
(ii) in the consolidated accounts
Tax is 25%.
(b) Assuming a disposal of half the holding and proceeds of $5 million:
(i) calculate the profit or loss arising in the consolidated accounts
(ii) explain how the residual holding will be accounted for
Ignore tax.

Question 3
The income statements for the year ended 31 December 2012 are as follows:
H S
$ $
Revenue 553,000 450,000
Operating costs (450,000) (400,000)
Operating profits 103,000 50,000
Dividends receivable 8,000 -
Profit before tax 111,000 50,000
Tax (40,000) (14,000)
Profit after tax 71,000 36,000

Retained earnings b/f 100,000 80,000

Profit after tax 71,000 36,000
Dividend paid (25,000) (10,000)
Retained earnings c/f 146,000 106,000

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Additional information
1. The accounts of the H group do not include the results of S.
2. On 1 January 2008 H acquired 70% of the shares of S for $100,000 when the fair value
of S’s net assets were $110,000. S has equity capital of $50,000. At that date, the fair
value of the NCI was $40,000.
3. S paid its 2012 dividend in cash on 31 March 2012.
4. Goodwill is to be accounted for based upon the fair value of NCI. No goodwill has
been impaired.
5. H has other subsidiaries participating in the same activities as S, and therefore the
disposal of S shares does not represent a discontinued operation per HKFRS 5.

Required:

(a) (i) Prepare the consolidated income statement for the year ended 31 December 2012
for the H group on the basis that H sold its holding in S on 1 July 2012 for
$200,000. This disposal is not yet recognized in any way in H group’s income
statement.
(ii) Compute the group retained earnings at 31 December 2012.
(iii) Explain and illustrate how the results of S are presented in the group income
statement in the event that S represented a discontinued activity per HKFRS 5.
Ignore tax on the disposal.
(b) (i) Prepare the consolidated income statement for the year ended 31 December 2012
for the H group on the basis that H sold half of its holding in S on 1 July 2012 for
$100,000. This disposal is not yet recognized in any way in H group’s income
statement. The residual holding of 35% has a fair value of $100,000 and leaves
the H group with significant influence.
(ii) Compute the group retained earnings at 31 December 2012.
Ignore tax on the disposal.

6. Group Accounts – Disposal with Trade Investment Retained

6.1 This situation is where the subsidiary becomes a trade investment, e.g. 90% holding is
reduced to a 10% holding.

6.2 Accounting for disposal – subsidiary to trade investment

(a) Consolidated statement of comprehensive income

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 (i) Pro rate the subsidiary’s results up to the date of disposal
 Consolidate the results up to the date of disposal
 Only include dividend income after the date of disposal
(ii) Include the group gain on part disposal
(b) Consolidated statement of financial position
(i) Recognize the residual holding retained as an investment, measured
at fair value in accordance with HKFRS 9.

7. Disposal where Control is not Lost (Increase in NCI)

7.1 For example if the parent holds 80% of the shares in a subsidiary and sells 5%, the
relationship remains one of a parent and subsidiary and as such will remain
consolidated in the group accounts in the normal way, but the NCI has risen from 20%
to 25%.
7.2 Where there is such an increase in the NCI:
(a) No gain or loss on disposal is calculated
(b) No adjustment is made to the carrying value of goodwill
(c) The difference between the proceeds received and change in the NCI is
accounted for in shareholders’ equity as follows:

$
Cash proceeds received X
NCI % increase × (net assets at date of change + unimpaired goodwill
of subsidiary) (X)
Difference to entity X

7.3 Example 7 – No loss of control

Until 30 September 2012, H held 90% of S. On that date it sold a 10% interest in the
equity capital for $15,000. At the date of share disposal, the carrying value of net
assets and goodwill of H were $100,000 and $20,000 respectively.

How should the disposal transaction be accounted for in the H Group accounts?

Solution:

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 Cash proceeds 15,000
Increase in NCI: [10% × (100,000 + 20,000)] (12,000)
Increase in equity 3,000

There is no gain or loss to the group as there has been no loss of control. Note that,
depending upon the terms of the share disposal, there could be either an increase or
decrease in equity.

7.4 Accounting for disposal – subsidiary to subsidiary

(a) Consolidated statement of comprehensive income

(i) Consolidate the subsidiary’s results for the whole year
(ii) Calculate the NCI relating to the periods before and after the
disposal separately and then add together
e.g. (X/12 × profit × 10%) + (Y/12 × profit × 40%)
(b) Consolidated statement of financial position
(i) Consolidate as normal, with the NCI valued by reference to the year-
end holding
(ii) Take the difference between proceeds and the change in the NCI to
shareholders’ equity as previously discussed.

Question 4
H has owned 90% of S for many years and is considering selling part of its holding, whilst
retaining control of S. At the date of considering disposal of part of the shareholdings in S,
the NCI has a carrying value of $7,200 and the net assets and goodwill have a carrying value
of $70,000 and $20,000 respectively.

(a) H could sell 5% of the S shares for $5,000 leaving it holding 85% and increasing the
NCI to 15%, or
(b) H could sell 25% of the S shares for $20,000 leaving it holding 65% and increasing the
NCI to 35%.

Required:

Calculate the difference arising that will be taken to equity for each situation.

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Question 5
H, S and A are three entities preparing their financial statements under HKFRSs. Their
statements of financial position as at 30 September 2012 are given below.

H S A
Non-current assets $000 $000 $000
Property, plant and equipment 160,000 60,000 40,000
Investments 80,000 - -
240,000 60,000 64,000
Current assets 65,000 50,000 36,000
Total assets 305,000 110,000 100,000

Equity capital ($1 shares) 50,000 20,000 15,000

Retained earnings 185,000 43,000 42,000
235,000 63,000 57,000
Non-current liabilities 25,000 18,000 20,000
Current liabilities 45,000 29,000 23,000
305,000 110,000 100,000

Note 1 – Investment by H is S
On 1 October 2010, H acquired 70% of the equity share capital of S for $45 million in cash,
when the balance on S’s retained earnings was $28 million. It was determined that at this
date, land with carrying value of $40 million had a fair value of $45 million.

On 30 September 2012, H acquired a further 10% of the equity shares of S paying $10
million in cash.

Note 2 – Investment by H in A
On 1 January 2009, H acquired 60% of the equity shares of A for $21 million in cash, when
the balance on A’s retained earnings was $15 million. It was determined that the book value
of A’s net assets on 1 January 2009 were equal to their fair values.

On 30 September 2012, H disposed of one quarter of its shareholding in A for $15 million
cash. H’s remaining 45% holding enabled H to exercise significant influence over the
operating and financial policies of A. The fair value of the remaining 45% holding was $35
million at 30 September 2012.

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H have recorded the proceeds of $15 million by debiting cash and crediting investments, but
no other entries have been made.

Note 3 – Intra-group trading

During the year ended 30 September 2012, H sold goods to S for $8 million. These goods
were sold at a profit margin of 25%. Half of these goods remain in S’s inventory at the
reporting date.

Note 4 – NCIs and goodwill

H’s policy is to value NCI at acquisition at fair value. The fair value of the NCI in S was
$17.4 million and the fair value of the NCI in S was $13 million at the relevant dates of
acquisition. No impairment losses have arisen on goodwill.

Required:

Prepare the consolidated statement of financial position of the H Group as at 30 September

2012.

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8. Subsidiaries Acquired Exclusively with a View to Subsequent
Disposal (HKFRS 5)

8.1 A subsidiary acquired exclusively with a view to resale is not exempt from
consolidation.
8.2 But if it meets the criteria in HKFRS 5:
(a) it is presented in the financial statements as a disposal group classified as held
for sale. This is achieved by amalgamating all its assets into one line item and
all its liabilities into another.
(b) it is measured, both on acquisition and at subsequent reporting dates, at fair
value less costs to sell.
8.3 The criteria include the requirements that:
(a) the subsidiary is available for immediate sale
(b) it is likely to be disposed of within one year of the date of its acquisition
(c) the sale is highly probable
8.4 A newly acquired subsidiary which meets these held for sale criteria automatically
meets the criteria for being presented as a discontinued operation.

8.5 Example 8 – HKFRS 5

H acquires S on 1 March 2012. S is a holding entity with two wholly-owned
subsidiaries, T and U. U is acquired exclusively with a view to resale and meets the
criteria for classification as held for sale. H’s year-end is 30 September.

On 1 March 2012 the following information is relevant:

(a) the identifiable liabilities of U have a fair value of $40m
(b) the acquired assets of U have a fair value of $180m
(c) the expected costs of selling U are $5m

On 30 September 2012, the assets of U have a fair value of $170m.

The liabilities have a fair value of $35m and the selling costs remain at $5m.

Required:

Discuss how U will be treated in the H Group financial statements on acquisition and
at 30 September 2012.

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Solution:

On acquisition the assets and liabilities of U are measured at fair value less costs to
sell in accordance with HKFRS 5’s special rule.

$m
Assets 180
Less: Selling costs (5)
175
Liabilities (40)
Fair value less costs to sell 135

At the reporting date, the assets and liabilities of U are remeasured to update the fair
value less costs to sell.
$m
Assets 170
Less: Selling costs (5)
165
Liabilities (35)
Fair value less costs to sell 130

The fair value less costs to sell has decreased from $135m on 1 March to $130m on
30 September. This $5m reduction in fair value must be presented in the consolidated
income statement as part of the single line item entitled ‘discontinued operations’.
Also included in this line items is the post-tax benefit or loss earned/incurred by U in
the March – September 2012 period.

The assets and liabilities of U must be disclosed separately on the face of the
statement of financial position. Below is the subtotal for the H Group’s current asset,
U’s assets will be presented as follows:
$m
Non-current assets held for sale 165

Liabilities directly associated with non-current assets classified

as held for sale 35

No disclosure is required.

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