Midterm

Question 1

What is required for control?

Answer 1

Power + exposure to var. return + linkage

Question 1

If you buy a company with a single important asset, you likely entered into…

Answer 1

Asset deal

Question 2

What equity do you include in the consolidated FS form the parent?

Answer 2

All the equity.

Question 3

What equity do you include in the consolidated FS from the subsidiary?

Answer 3

Only post acquisition generated equity.

Question 4

How can goodwill go down in the consolidated FS?

Answer 4

Impairment

Question 5

What is meant by line-by-line consolidation?

Answer 5

We add all assets and liabilities to arrive to cons figures.

Question 6

Goodwill may arise

Answer 6

On business combinations.

Question 7

If the acquisition was done on 3rd May and you prepare the FS for 3rd May how much is PAP of S?

Answer 7

0

Question 8

Downstream URP

Answer 8

is deducted from group RE

Question 9

Who is exempt from consolidation?

Answer 9

If the parent at the same time is a subsidiary

Question 10

Negative goodwill

Answer 10

Shall be included in net profit

Question 11

When consolidating NCI

Answer 11

you include all the assets and liabilities of the entity

Question 12

In transit items are

Answer 12

will be included to those financials that it goes to

Question 13

Cost of control may be determined from the

Answer 13

BS, Investment line

Question 14

When consolidating the income statement of a group with a single subsidiary

Answer 14

dividend received by H is eliminated

Question 15

If there is FSA, the fair value adjustment shall be done

Answer 15

in W2

Question 16

Which entity may not be an associate?

Answer 16

An entity where we make all the decisions.

Question 17

Goodwill on associates

Answer 17

May happen but will not be separated from the associate

Question 18

What is included in the book value of an associate?

Answer 18

SOPIA, “Goodwill”, Net assets @A

Question 19

Which out of these will be included in W5?

Answer 19

Downstream URP, PAP of S

Question 20

Which asset may be recognised under FSA?

Answer 20

Fair value difference of a machine of subsidiary, contingent liability of the subsidiary

Question 21

Which consolidation method is not available for consolidation?

Answer 21

Proportionate consolidation

Question 22

What equity do you include in the consolidated FS from the parent?

Answer 22

All the equity

Question 23

Which is NOT included in the book value of an associate?

Answer 23

Negative goodwill

Question 24

What equity do you include in the consolidated FS from the subsidiary?

Answer 24

Only post acquisition generated equity.

Question 25

Downstream URP

Answer 25

Is deducted from the group retained earnings

Question 26

Elimination of downstream URP is included in working?

Answer 26

W5

Question 27

Elimination of upstream URP is included in working?

Answer 27

W2

Question 28

Elimination of cash in transit is included in working?

Answer 28

W6

Question 29

Elimination of FSA of subsidiary is included in working?

Answer 29

2

Question 30

Elimination of receivables/payables is included in working?

Answer 30

6