4. On 1 January 2010, Club Ltd acquired 80% of the ordinary shares of a subsidiary, Golf Org for £900,000. Golf Org trades in “potts”. On 1 January 2010 the balance on the accumulated profits of Golf Org was 640,000 “potts” and the share capital of Golf Org was 4,800,000 “potts”.

The summary income statements and statements of financial position of Golf Org are given as follows:

The following information is also available:

1. Non-current assets were acquired on 1 January 2010.

2. Opening inventories were acquired on 12 November 2015 and closing inventories were acquired on 15 December 2016.

3. The net profit for 2016 in the statement of comprehensive income for Golf Org is 580,000 potts

5 The translated retained earnings brought forward for Golf Org is £876,668 under the closing rate method and the translated retained earnings brought forward for Golf Org is £398,000 under the temporal method

6 Impairment of 20% of the value of the goodwill is to be provided in 2016.

Required

(a) When should the temporal and the closing rate methods of foreign currency translation be used according to IAS 21?

(b) Translate the statement of financial position of Golf Org using the closing rate method

(c) Translate the statement of financial position of Golf Org using the temporal method.

(d) Calculate the goodwill that would be recorded in the consolidated statement of financial position for Club Ltd as at 31 December 2016 under the closing rate method.