IFRS 10

Question 1

What is a parent?

Answer 1

An entity controls another entity

Question 2

What is a subsidiary?

Answer 2

Where entity is controlled

Question 3

Investor controls investee when?

Answer 3

Investor has power over investee

Question 4

What do consolidated financial statements present?

Answer 4

Presents the assets, liabilities, equity, etc of parent and subsidiaries as if they were a single economic entity

Question 5

When does a company usually have control?

Answer 5

When it has acquired over 50%

Question 6

Where is equity capital included in net assets working?

Answer 6

At reporting date and acquisition date (Addition)

Question 7

Where is share premium included in net assets working?

Answer 7

At reporting date and acquisition date (Addition)

Question 8

Where is other components of equity included in net assets working?

Answer 8

At reporting date and acquisition date (Addition)

Question 9

Where is retained earnings included in net assets working?

Answer 9

At reporting date and acquisition date (Addition)

Question 10

Where is goodwill in accounts to sub included in net assets working?

Answer 10

At reporting date and acquisition date (Deducted)

Question 11

Where is fair value adjustment included in net assets working?

Answer 11

At reporting date and acquisition date (Added)

Question 12

Where is PURP if sub is the seller in net assets working?

Answer 12

At reporting date (Deducted)

Question 13

Post-acq depreciation amonut on FVA in net assets working?

Answer 13

At reporting date (Deducted)

Question 14

Where does total acquisition in net assets go?

Answer 14

In the goodwill working

Question 15

Goodwill at acquisition?

Answer 15

FV of purchase consideration + NCI at acquisition - total acquisition in net assets

Question 16

Total goodwill in SFP calculation?

Answer 16

Goodwill at acquisitioqn - impairment to date

Question 17

If full goodwill method used?

Answer 17

NCI value = FV at NCI at date of acquisition

Question 18

If partial goodwill method used?

Answer 18

NCI% at FV of subsidiary’s net assets at acquisition

Question 19

NCI calculation?

Answer 19

NCI at acquisition + NCI% of post-acquisition movement of net assets - NCI% of goodwill impaired (FV)

Question 20

Group retained earnings (1st step)

Answer 20

100% parent’s retained earnings

Question 21

Group retained earnings (2nd step)

Answer 21

Group share of post-acq retained earnings

Question 22

What happens with gain on bargain purchase?

Answer 22

Added to retained earnings

Question 23

What happens with goodwill impairment in group retained earnings?

Answer 23

Deducted from retained earnings

Question 24

What happens with PURP if parent was seller in group retained earnings?

Answer 24

Deducted from retained earnings

Question 25

PURP double entry?

Answer 25

Debit: Cost of sales Credit: Inventory

Question 26

What is GIT?

Answer 26

Parent dispatched goods to subsidiary with selling price. These goods weren't received until after year end

Question 27

Share for share exchange?

Answer 27

Shares of subsidiary * P% retained earnings * 2/3 * share price

Question 28

Goods in transit double entry?

Answer 28

Debit: Inventory Credit: Payables

Question 29

Post-acquisition figure?

Answer 29

Reporting figure - acquisition figure

Question 30

Impairment of positive goodwill (Double entry)

Answer 30

Debit: Expenses Debit: Retained earnings Credit: Goodwill

Question 31

How should contingent consideration be calculated?

Answer 31

Measured at FV and adjust goodwill if at acquisition date

Question 32

What happens with negative goodwill?

Answer 32

Credit to SPL Gain from bargain purchase

Question 33

Dividends paid by subsidiary treatment?

Answer 33

Eliminated on consolidation in both CSFp and CSPL

Question 34

Dividends paid to NCI treatment?

Answer 34

Not presented in CSFP

Question 35

Deferred consideration discount rate often referred to as?

Answer 35

Cost of capital

Question 36

Eliminate intragroup revenue in CSPL?

Answer 36

Debit: Revenue Credit: Cost of sales

Question 37

Eliminate unrealised profit in CSPL?

Answer 37

Debit: Cost of sales Credit: Inventory

Question 38

Cancel a loan in CSPL?

Answer 38

Debit: Loan payable Credit: Loan receivable

Question 39

Eliminate the interest in CSPL?

Answer 39

Debit: Finance income Credit: Finance expense

Question 40

Which impairment is included?

Answer 40

Only current year impairment losses included

Question 41

What happens with dividend income in CSPL?

Answer 41

Is removed

Question 42

When can a group structure change?

Answer 42

If parent company sells shares in a subsidiary

Question 43

If there's a disposal (affect on individual accounts)

Answer 43

Shares sold in parent's individual accounts Take proceeds - investment

Question 44

If there's a disposal (affect on group accounts)

Answer 44

Sold net assets of subsidiarys + goodwill Calculate group profit/loss on disposal

Question 45

Disposal calculation (SPL)

Answer 45

Proceeds (P%) + NCI (S%) - NA on disposal (100%) - Goodwill (100%)

Question 46

Is share acquisition included in group retained earnings?

Answer 46

No

Question 47

Percentage used in RE

Answer 47

Parent's %

Question 48

Percentage used in NCI

Answer 48

Subsidiary's %

Question 49

When Acquisition amount < net assets

Answer 49

Credit difference to SPL

Question 50

Negative change in fair value at consideration?

Answer 50

Debit current liabilities Credit retained earnings

Question 51

Intragroup sales example?

Answer 51

Consistently made sales of $20000 each month. This is then deducted

Question 52

Remaining inventory in company?

Answer 52

Added to consolidation

Question 53

What figure is included in the total equity?

Answer 53

Equity at reporting date + retaiend earnings adjustments

Question 54

Is retained earnings part of equity?

Answer 54

Yes

Question 55

Unrealised profit if parent was seller?

Answer 55

Deducted from group retained earnings

Question 56

Unrealised profit if subsidiary was seller?

Answer 56

Deducted from reporting date of net assets working

Question 57

Amount of consideration attributable to?

Answer 57

Shares + deferred consideration

Question 58

An intangible asset that may be recognised separately from goodwill?

Answer 58

A new research project, as research is not capitalised

Question 59

FV NCI?

Answer 59

Shares * NCI % * value of shares

Question 60

FVA adjustments

Answer 60

Reducted from total

Question 61

Uniform accounting policy for IFRS 10 menaing?

Answer 61

Look for IAS 8

Question 62

Dividend received calculation?

Answer 62

Number of shares * dividend per share

Question 63

Post-acquisition profits treatment?

Answer 63

Included in retained earnings

Question 64

If fair value of subsidiary's contingent liabilities can be reliably measured at date of acquisition?

Answer 64

They should be included in consolidated net assets and increase goodwill

Question 65

Calculate loan note for consideration?

Answer 65

Shares acquired * $ in loan note/shares acquired

Question 66

FVA of asset below carrying amount effect on group retained earnings?

Answer 66

Increases GRE

Question 67

Impairment of goodwill in group retained earnings?

Answer 67

Decreases GRE