Chapter 10 - Group Accounts - The Consolidated Statement Of Financial Position

Question 1

Principles of IFRS 10

Answer 1

Consolidated financial statements are produced but the parent company in addition to their single entity statements and are for the shareholders

Need to use uniform accounting policies

Identifies how to establish control and therefore a group

Question 2

Rules for group accounts

Answer 2

The investment in the subsidiary never appears in the the consolidated accounts, it is replaced by the net assets

Share capital = parent company only

Assets and liabilities are added together

Goodwill needs to be calculated and shown as an intangible asset

Retained earnings need to be calculated

Question 3

IFRS 3

Answer 3

Provides key definitions and rules for calculating goodwill

Goodwill is defined as: the excess of cost of the business combination over the acquirers interest in the fair value of the identifiable assets and liabilities