ICAN 2024 Financial Reporting | Mixed

Badary PLC statement of financial position as at March 31, 2021 Assets: 31-03-21 31-03-20 Non-current assets: N'000 N'000 Property, plant and equipment 350,000 110,000 Investments 60,000 30,000 410,000 140,000 Current assets: Inventories 295,000 120,000 Trade receivables 90,000 60,000 Bank 15,000 40,000 400,000 220,000 Total assets 810,000 360,000 Equity and liabilities Ordinary share capital of 80 kobo per share 220,000 120,000 Share premium 60,000 30,000 Retained earnings 280,000 119,000 560,000 269,000 Non-current liabilities: 10% Redeemable loan notes 50,000 10,000 Current liabilities: Trade payables 65,000 14,000 Taxation 70,000 12,000 Bank overdraft 25,000 5,000 Accrued expenses 40,000 50,000 200,000 81,000 Total liabilities 250,000 91,000 Total equity and liabilities 810,000 360,000 --- PAGE BREAK --- Statement of profit or loss for the year ended March 31, 2021 N' 000 Revenue 490,000 Cost of sales (222,000) Gross profit 268,000 Administrative expenses (90,000) Distribution cost (40,000) Finance cost (5,000) Dividend received 153,500 18,500 Profit before taxation 286,500 Income tax expense (70,000) Profit for the year 216,500 Additional Information i. During the year ended March 31, 2021 plant and equipment with a carrying amount of N40,000,000 was sold for N55,000,000. The profit or loss on disposal was charged to distribution expenses. (ii) Dividend of 2 kobo per share was paid in the year ended March 31, 2021 and there were also bonus issues. (iii) Depreciation charged for the year was N10,000,000 on furniture and N30,000,000 on plant and equipment. (iv) During the year, an investment which cost N12,500,000 some years ago was disposed for N20,000,000. The profit or loss on disposal was charged to administrative expenses. (v) Dividends received were from investment in shares and immediate disposal of rights issue from the investment in shares in a blue-chip company.

The following are the statements of financial position of Sokoto Nig. PLC and Niger Nig. LTD for the year ended October 31, 2023. Sokoto Nig. PLC Niger Nig. LTD. N’000 N’000 Non-current assets: Plant and machinery 2,600 560 Furniture and fittings 1,600 400 4,200 960 Investment: Shares in Niger. Nig. LTD at cost 1,600 - Current assets: Inventories at cost 1,760 560 Trade receivables 1,160 840 Cash and cash equivalents 800 - 3,720 1,400 Total assets 9,520 2,360 Equity and liabilities: Equity: N1 ordinary shares 5,600 1,360 Retained earnings 1,720 400 7,320 1,760 Current liabilities: Trade payables 2,200 440 Bank overdraft - 160 2,200 600 Total equity and liabilities 9,520 2,360 Additional information: i. Sokoto Nig. PLC purchased 70% of the issued ordinary share capital of Niger Nig. LTD four years ago, when the retained earnings of Niger Nig. LTD were N160,000. There had been no impairment of goodwill. ii. For the purpose of the acquisition, plant and machinery in Niger Nig. LTD with carrying amount of N400,000 was revalued to its fair value of N480,000. The revaluation was not recorded in the accounts of Niger Nig. LTD. Depreciation is charged at 20% using the straight-line method. iii. Sokoto Nig. PLC sells goods to Niger Nig. LTD at a mark-up of 25%. At October 31, 2023 the inventories of Niger Nig. LTD included N360,000 of the goods purchased from Sokoto Nig. PLC. --- PAGE BREAK --- iv. Niger Nig. Ltd owes Sokoto Nig. PLC N280,000 for goods purchased and Sokoto Nig. PLC owes Niger Nig. LTD N120,000. v. It is the group policy to value non-controlling interests at fair value. vi. The market price of the shares of the non-controlling shareholders just before the acquisition was N1.50 per share.

Lamido Limited is a courier service company which operates in Nigeria and West Africa. Initially, Lamido Limited experienced strong growth, but in recent periods the company has been criticised for under investing in its non-current assets. Lamido Limited statement of financial position as at December 31 2022 2021 ₦’000 ₦’000 Non-current assets Property, plant and equipment 317,000 174,000 Intangible assets 20,000 16,000 337,000 190,000 Current assets Inventories 580 490 Trade and other receivables 6,100 6,300 Cash and equivalents 9,300 22,100 Total current assets 15,980 28,890 Total assets 352,980 218,890 Equity and Liabilities Equity Ordinary share capital 3,000 3,000 Retained earnings 44,100 41,800 Revaluation surplus 145,000 NIL Total equity 192,100 44,800 Liabilities: Non-current liabilities 6% loan notes 130,960 150,400 Current liabilities --- PAGE BREAK --- Trade and other payables 10,480 4,250 6% loan notes 19,440 19,440 Total current liabilities 29,920 23,960 Total equity and liabilities 352,980 218,890 Other extracts from Lamido Limited financial statements for the years ended December 31. 2022 2021 ₦’000 ₦’000 Revenue 154,000 159,000 Profit from operations 12,300 18,600 Finance cost (9,200) (10,200) Cash generated from operation 18,480 24,310 The following information is also relevant: i. Lamido Limited had exactly the same delivery volumes in 2022 as in 2021 with customers’ base being the same in both years. ii. In October 2022, Lamido Limited had to renegotiate its operating licenses in three of its countries of operation. This led to increase in the fees Lamido Limited had to pay to operate in these countries. The operating licenses in five other countries are due to expire in December 2022 and Lamido Limited is currently negotiating with the concerned authorities of these countries.

Errors might happen when preparing financial statements. If such errors are discovered quickly, they are corrected before the finalised financial statements are published. When this happens, the correction of the error is of no significance for the purpose of financial reporting. However, when an error is discovered that relates to a prior accounting period, a problem may arise.

Akwa Nig. Limited is a private limited company planning to be registered with the Nigeria Exchange Limited (NGX). The company is engaged in the conversion of petrol engine into compressed gas engine.

IAS 38 - Intangible Assets allows a business to choose one of two measurement models as its accounting policy for intangible assets after acquisition. However, the same model should be applied to all assets in the same class.