Advnced Financial Reportint Lecture 3

Question 1

2 Reasons for preparting consolidated accounts

Answer 1

1. More meaningful EPS figure
2. Inflating sales by selling within the group

Question 2

What are the alternative methods of preparing consolidated accounts

Answer 2

1. The purchase method
2. Pooling of interests method

Question 3

What is the treatment of Positive goodwill

Answer 3

Impairment test in accordance with IAS 36

Question 4

What is the treatment of negative goodwill

Answer 4

Recognise immediately in income statement under IFRS 3.