Consolidated Financial Statement

Question 1

When

Answer 1

> 50% and exerting control

Question 2

When not GAAP

Answer 2

Under gaap: all domestic and foreign majority owned subsidiaries must be consolidated except when significant doubt exists regarding the parent’s ability to control the sub such as when:

the sub is in a legal reorganization or
bankruptcy and/or the sub operated under severe foreign restrictions

Question 3

When not IFRS

Answer 3

must consolidate unless

1) parent company itself is a wholly owned sub or partially owned sub and other owners dont oppose to not producing consolidated statements
2) parent company is not publicly traded
3) if a owns b and b owns c and a consolidates all then c does not need to consolidate

Question 4

PARENT AND SUB

Answer 4

Measured at FV

Question 5

Fundamental principles gaap and ifrs

Answer 5

recognition principle: parent recognized ALL of sub’s assets and liab including identifiable intangibles

measurement principle: measures 100% of assets and liab at fv (even if you only own 80% of the company)
extra stuff goes to non controlling interest line item on the b/s

Question 6

Fundamental principles gaap and ifrs

Answer 6

recognition principle: parent recognized ALL of sub’s assets and liab including identifiable intangibles

measurement principle: measures 100% of assets and liab at fv (even if you only own 80% of the company)
extra stuff goes to non controlling interest line item on the b/s

Question 7

MAJOR diff between acq and cost and equity

Answer 7

acq: 100% assets and liab marked up

cost and equity: only interested in ownership %