Consolidations & Group Financial Statements (IFRS10, IFRS3)

Question 1

what is a group

Answer 1

a parent with 1+ subsidaries which are controlled by the parent

Question 2

what is a subsidary

Answer 2

an entity that is controlled by another entity

Question 3

can subsidaries be parents

Answer 3

yes

Question 4

when may a parent company not prepare group statements

Answer 4

parent is a wholly owned subsidiary itself

parent’s shares are not publicly traded

parent’s ultimate parent company presents group accounts that comply with international standards

Question 5

what is control

Answer 5

> 50% shares

voting rights

right to appoint or remove members of key management

contractual rights

right to direct sub for parents benefit

Question 6

is it possible to have <50% osc and still have control

Answer 6

yes

Question 7

what is consolidation

Answer 7

adding line by line individual financial statements

Question 8

what should be cancelled out when consolidating

Answer 8

items which appear as an asset in one company and as a liability in the other

Question 9

what is NCI

Answer 9

non controlling interest

Question 10

what is non controlling interest

Answer 10

if a parent company does not own 100% of a subsidaries share capital, the remainder of the subsidiarys share capital are held by non controlling interest

Question 11

which assets from the subsidiary are brought into consolidated accounts

Answer 11

ALL because control

Question 12

two ways of calc NCI

Answer 12

• on fair value
• get % of post acq movement in retained earnings