Consolidated financial statements are required in which ofthe following situations?a. Only when a company can exert significant influenceover another company.b. Only when a company has a passive investment inanother company.c. Only when a parent company can exercise control overits subsidiary.d. None of the above.
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Consolidated financial statements are required in which of
the following situations?
a. Only when a company can exert significant influence
over another company.
b. Only when a company has a passive investment in
another company.
c. Only when a parent company can exercise control over
its subsidiary.
d. None of the above.
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- Answer with true or false. 1. The non-controlling interest is presented in the statement of financial position as an asset. 2. Foreign subsidiaries need not be consolidated in preparing the consolidated financial statements if they are reported as a separate operating group under segment reporting. 3. Consolidated financial statements is needed if the investor has significant influence over the investee company.Answer with true or false. No need explanation. 1. Indirect cost incurred by the entity in business combination is recognized as expense. 2. PFRS 10 defines control as the power to govern the financial and operating policies as to obtain benefits from its activities. 3. An investor has no power over the investee even if the investor holds the majority of the voting rights if those rights are not substantive. 4. A subsidiary should be excluded from the consolidated statements if the subsidiary operates under governmentally impose uncertainty.Do you agree with the accounting treatment that Overstock typically applied to the revenues generated by its "Partner" line of business? Why or why not?
- Which of the following is NOT a required disclosure for any entity that holds an interest in a VIE? a.The significant judgments and assumptions made by an enterprise in determining whether it must consolidate a VIE and/or disclose information about its involvement in a VIE b.How the entity's involvement involvement with the VIE is perceived by Wall Street analysts c.The nature of restrictions on a consolidated VIE’s assets and on the settlement of its liabilities reported by an enterprise in its statement of financial position, including the carrying amounts of such assets and liabilities. d. The nature of, and changes in, the risks associated with an enterprise’s involvement with the vieWhich of the following is not an advantage of establishing a special purpose entity (SPE)? O a. avoiding consolidation O b. low cost of financing O c. use of governing agreements to restrict the SPE's activities O d. can currently be used as a way to provide off balance sheet financing1. PAS 28 defines an ‘associate’ as Choices An entity that controls one or more entities. An entity over which the investor has significant influence. A joint arrangement whereby the parties that have joint control of the arrangement have rights to the net assets of the arrangement. An entity that is controlled by another entity. 2. In accordance with PAS 1, which of the following gains or losses from reclassification of financial assets need not be presented separately in the profit or loss section or the statement of profit or loss? Choices None of these. Reclassification of financial assets out of the FVTOCI measurement category to FVTPL. Reclassification of financial assets out of the amortized cost measurement category to FVTPL. Reclassification of financial assets out of the FVTPL measurement category.
- Consolidated financial reporting is appropriate when one entity has a controlling financial interest in another entity. The usual condition for a controlling financial interest is ownership of a majority voting interest. But in some circumstances, control does not rest with the majority owner-especially, when noncontrolling owners are contractually provided with approval or veto rights that can restrict the actions of the majority owner. In these cases, the majority owner employs the equity method rather than consolidation. Required Address the following by searching the FASB ASC Topic 810 on consolidation. What are protective noncontrolling rights? What are substantive participating noncontrolling rights? What noncontrolling rights overcome the presumption that all majority-owned investees should be consolidated? Zee Company buys 60 percent of the voting stock of Bee Company with the remaining 40 percent noncontrolling interest held by Bee's former owners, who negotiated the…A concept that a business enterprise will not be sold or liquidated in the nearfuture is known as :(a) Going concern(b) Economic entity(c) Monetary unit(d) None of the aboveWhich of the following accounting treatments for costs related to business combination is incorrect? Group of answer choices The costs related to issuance of financial liability at fair value through profit or loss shall be recognized as expense while those related to issuance of financial liability at amortized cost shall be recognized as deduction from the book value of financial liability or treated as discount on financial liability to be amortized using effective interest method. The costs related to issuance of stock or equity securities shall be deducted/debited from any share premium from the issue and any excess is charged to “share issuance cost” reported as contract-equity account against either (1) share premium from other share issuances or (2) retained earnings Acquisition related costs such as finder’s fees; advisory, legal, accounting, valuation and other professional and consulting fees; and general administrative costs, including the costs of maintain an…
- Explain why transactions between members of a consolidated firm should not be reflected in the consolidated financial statements.What is a noncontrolling interest? Select one: A. A component of debt representing amounts owed to a subset of investors B. Amounts distributed to investors that own less than a controlling interest C. The portion of a subsidiary’s net assets not owned by the parent-company D. An amount equal to investor contributions less dividends distributedExplain whether the following statement is true or false: Only weak companies issuedebentures.