Part A
a)
(i) The Qube Consortium is formed with Qube, GIP, CPPIB and Shunrong, and Qube Group is Qube Holding Ltd together with subsidiaries. Therefore, the acquirer refers to the subsidiary of Qube. According to the Bid Implementation Deed (2016 p. 2), Qube acquired 100% of the Port Business from Asciano for $2650 million. As Asciano’s acquirer, it should account this acquisition as below:
Dr Investment in Ports business (Asciano Ltd.) Cr Issued capital Cr Retained earning
(ii) The Qube Group is composed of Qube Holding Ltd. and its subsidiaries, hence, Qube Holding is regarded as the parent entity of this group. The Qube Group has acquired a 100% interest in Asciano. According to AASB 127.18(a), we have to make consolidation
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As it is mentioned in ASX Announcement (2016), this combination will create significant opportunities for productivity improvement and innovation across the Australian logistics and transportation sector. Hence, the revenue is possible to grow fast after the acquisition, with improved supply chain efficiency and benefit from synergies. The balance of revenue from sales and services in the consolidated financial statement will definitely change a lot.
Another account that is going to be different should be retained earnings.
According to Arthur, Luff and Keet (2012 p. 55), after any necessary consolidation adjustments to eliminate the effect of inter-group transactions, a subsidiary will generate profits or losses, which will be treated as profits or losses of the entire group and will also become part of consolidated equity. Therefore, retained earnings will definitely change in the future.
Part
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To be specific, as the parent company of Qube Group, the issuing of Qube Holding Ltd shares to Asciano’s former shareholders in the acquisition of Asciano’s Ports Business is an element of control.
With reference to Bid Implementation Deed (2016), the Qube Group acquired a 100% interest in Asciano’s terminal and logistics business, which means that the Qube Group has obtained control over the Ports business. Consequently, the revenue generated by Ports business will be added to the revenue of the whole group.
We can observe from the announcement that this acquisition is accomplished partly cash and partly shares as Qube paid cash and issued new shares to Asciano’s shareholders to acquire Port Business. After receiving shares in Qube Holding Ltd, former shareholders of Asciano will definitely get the dividend and have access to the voting