Calculate the amount that zzz should

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ZZZ acquired 100% of SUB's ordinary shares on 1 January 2017 for R1,136,000 when SUB's retained earnings were R260,000. At 1 January 2017 the fair value of the net assets of SUB exceeded their carrying value by R110,000. The remaining useful life of these assets was 11 years from acquisition.

SUB has not issued any new shares since acquisition by ZZZ. SUB is ZZZ's only subsidiary. ZZZ calculated that goodwill in its subsidiary was impaired by 20% at 31 December 2019.

The equity of SUB as at 31 December 2019:

R000

Ordinary share capital 430

Share premium 86

Retained earnings 324

840

The retained earnings of ZZZ were R2,100,000 at 31 December 2019.

Required:

Question 1: Calculate the amount that ZZZ should include in its consolidated statement of financial position as at 31 December 2019 for:

(i) Goodwill

(ii) Group retained earnings

Reference no: EM132557705

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