Week 6/7 - Consolidated Financial Statements

Question 1

What does IFRS 10 define Consolidated Financial Statements as?

Answer 1

An entity that controls one or more entities

Question 2

What does IFRS 10 require in order to prepare a consolidated financial statement for its shareholders?

Answer 2

A parent

Question 3

What is a parent?

Answer 3

An entity that controls one or more entities

Question 4

When would a parent not need to prepare a consolidated financial statement?

Answer 4

• It is an owned subsidiary of another company whose owners do not object
• Not a listed company
• Its parent prepares consolidated financial statements that comply with IFRS

Question 5

What is the purpose of consolidated financial statements?

Answer 5

• To present the assets, liabilities and equity of the parent company
• To present a faithful representation of the economic activities of the group as a single economic entity

Question 7

What is a joint venture?

Answer 7

An arrangement in which the parties that have joint control of an arrangement have rights to the net assets

Question 8

What is a joint operation?

Answer 8

An arrangement in which the parties that have joint control of an arrangement have rights to the assets and obligations for the liabilities