32 - Accounting Requirements of Consol

Question 1

IFRS 10 elements of control?

Answer 1

Power over the investee
Exposure or rights to variable returns
Can use it’s power over the investee to affect returns

Question 2

Power is defined as?

Answer 2

Existing rights that give the current ability to direct relevant activities

Question 3

Small company exemption for consolidated fs?

Answer 3

2/3:

Annual turnover of not more than £10.2m net or £12.2m gross

Balance sheet total of not more than £5.1m net or £6.1m gross

Average number of employees not more than 50

Question 4

Exemption - EEA parent

Answer 4

Included in audit consol f/s for a larger group
They’re provided to companies house
Any NCIs do not request preparation
Parent is not listed on any regulated market of an EEA state

If not EEA have to comply with EU 4th and 7th directives or equivalent e.g IFRS

Question 5

IFRS10 exemptions to consol

Answer 5

Wholly owned or partially owned and other owners don’t object
Debt or equity not traded in public market
Parent produces publicly available IFRS fs

Question 6

Investment entities

Answer 6

Exempt from consol

Classify its investments as FVTPL

Question 7

What is a structured entity?

Answer 7

Entity designed so that voting or similar rights are not the dominant factor in deciding who controls
E.g contractual or admin

Features:
Restricted activities
Narrow defined objective
Thin capitalisation

Question 8

Parties that are not related?

Answer 8

Two entities just cos they have key personnel in common/sign influence

Two joint venturers that share control over a JV

Providers of finance to the entity

Entity and customer etc

Question 9

Three categories of related party disclosures?

Answer 9

Group relationships - name and ultimate controlling party

Related party transactions - info about and nature of relationship (amount, o/s balances,expense for bad debt)

Management compensation 
(Short/long term benefits, pension, termination benefits, share based payments)