CH12 group accounts - basics

Question 1

Control =

Answer 1

> 50% - subsidiary > consolidate

Question 2

Significant influence =

Answer 2

20-50% - associate > equity accounting

Question 3

No influence =

Answer 3

<20% - no influence - show cost of those investments as an asset

Question 4

Control and own? what is the difference?

Answer 4

There is a difference between what you control and what you own. If you own 80% shares in a sub, you control ALL of it, but you only own 80% of it.

The difference is called the NCI

Question 5

definition of control in IFRS 10

Answer 5

Question 6

consolidated sfp

Answer 6

Question 7

consolidated sopl?

Answer 7

Question 8

consolidate sofp

Answer 8

Question 9

Is GW amortised?

Answer 9

NO. It is annually tested for impairment

Question 10

Goodwill calc

Answer 10

Question 11

What happens if GW is -ve

Answer 11

gain on a bargain purchase - treat as income in the CSPL

Question 12

GW calc - proportionate method (bounce back)

Answer 12

Question 13

the parent company both owns and controls 100% of the proportionate basis GW - t or f?

Answer 13

True

Question 14

the parent company both owns and controls 100% of the FV basis GW - t or f?

Answer 14

False - there is a GW element to the NCI