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IAS & IFRS Standards Overview > IFRS 10 > Flashcards

IFRS 10 Flashcards

1
Q

What is a parent?

A

An entity controls another entity

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2
Q

What is a subsidiary?

A

Where entity is controlled

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3
Q

Investor controls investee when?

A

Investor has power over investee

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4
Q

What do consolidated financial statements present?

A

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

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5
Q

When does a company usually have control?

A

When it has acquired over 50%

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6
Q

Where is equity capital included in net assets working?

A

At reporting date and acquisition date (Addition)

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7
Q

Where is share premium included in net assets working?

A

At reporting date and acquisition date (Addition)

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8
Q

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

A

At reporting date and acquisition date (Addition)

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9
Q

Where is retained earnings included in net assets working?

A

At reporting date and acquisition date (Addition)

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10
Q

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

A

At reporting date and acquisition date (Deducted)

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11
Q

Where is fair value adjustment included in net assets working?

A

At reporting date and acquisition date (Added)

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12
Q

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

A

At reporting date (Deducted)

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13
Q

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

A

At reporting date (Deducted)

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14
Q

Where does total acquisition in net assets go?

A

In the goodwill working

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15
Q

Goodwill at acquisition?

A

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

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16
Q

Total goodwill in SFP calculation?

A

Goodwill at acquisitioqn - impairment to date

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17
Q

If full goodwill method used?

A

NCI value = FV at NCI at date of acquisition

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18
Q

If partial goodwill method used?

A

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

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19
Q

NCI calculation?

A

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

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20
Q

Group retained earnings (1st step)

A

100% parent’s retained earnings

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21
Q

Group retained earnings (2nd step)

A

Group share of post-acq retained earnings

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22
Q

What happens with gain on bargain purchase?

A

Added to retained earnings

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23
Q

What happens with goodwill impairment in group retained earnings?

A

Deducted from retained earnings

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24
Q

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

A

Deducted from retained earnings

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25
Q

PURP double entry?

A

Debit: Cost of sales
Credit: Inventory

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26
Q

What is GIT?

A

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

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27
Q

Share for share exchange?

A

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

28
Q

Goods in transit double entry?

A

Debit: Inventory
Credit: Payables

29
Q

Post-acquisition figure?

A

Reporting figure - acquisition figure

30
Q

Impairment of positive goodwill (Double entry)

A

Debit: Expenses
Debit: Retained earnings
Credit: Goodwill

31
Q

How should contingent consideration be calculated?

A

Measured at FV and adjust goodwill if at acquisition date

32
Q

What happens with negative goodwill?

A

Credit to SPL
Gain from bargain purchase

33
Q

Dividends paid by subsidiary treatment?

A

Eliminated on consolidation in both CSFp and CSPL

34
Q

Dividends paid to NCI treatment?

A

Not presented in CSFP

35
Q

Deferred consideration discount rate often referred to as?

A

Cost of capital

36
Q

Eliminate intragroup revenue in CSPL?

A

Debit: Revenue
Credit: Cost of sales

37
Q

Eliminate unrealised profit in CSPL?

A

Debit: Cost of sales
Credit: Inventory

38
Q

Cancel a loan in CSPL?

A

Debit: Loan payable
Credit: Loan receivable

39
Q

Eliminate the interest in CSPL?

A

Debit: Finance income
Credit: Finance expense

40
Q

Which impairment is included?

A

Only current year impairment losses included

41
Q

What happens with dividend income in CSPL?

A

Is removed

42
Q

When can a group structure change?

A

If parent company sells shares in a subsidiary

43
Q

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

A

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

44
Q

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

A

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

45
Q

Disposal calculation (SPL)

A

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

46
Q

Is share acquisition included in group retained earnings?

A

No

47
Q

Percentage used in RE

A

Parent’s %

48
Q

Percentage used in NCI

A

Subsidiary’s %

49
Q

When Acquisition amount < net assets

A

Credit difference to SPL

50
Q

Negative change in fair value at consideration?

A

Debit current liabilities
Credit retained earnings

51
Q

Intragroup sales example?

A

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

52
Q

Remaining inventory in company?

A

Added to consolidation

53
Q

What figure is included in the total equity?

A

Equity at reporting date + retaiend earnings adjustments

54
Q

Is retained earnings part of equity?

A

Yes

55
Q

Unrealised profit if parent was seller?

A

Deducted from group retained earnings

56
Q

Unrealised profit if subsidiary was seller?

A

Deducted from reporting date of net assets working

57
Q

Amount of consideration attributable to?

A

Shares + deferred consideration

58
Q

An intangible asset that may be recognised separately from goodwill?

A

A new research project, as research is not capitalised

59
Q

FV NCI?

A

Shares * NCI % * value of shares

60
Q

FVA adjustments

A

Reducted from total

61
Q

Uniform accounting policy for IFRS 10 menaing?

A

Look for IAS 8

62
Q

Dividend received calculation?

A

Number of shares * dividend per share

63
Q

Post-acquisition profits treatment?

A

Included in retained earnings

64
Q

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

A

They should be included in consolidated net assets and increase goodwill

65
Q

Calculate loan note for consideration?

A

Shares acquired * $ in loan note/shares acquired

66
Q

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

A

Increases GRE

67
Q

Impairment of goodwill in group retained earnings?

A

Decreases GRE

IAS & IFRS Standards Overview (73 decks)

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