Do you think the FASB made the correct decision in requiring consolidated financial statements to recognize all subsidiary's assets and liabilities at fair value regardless of the percentage ownership acquired by the parent?
Q: Describe the difference between the economic entity concept and the parent company concept…
A: The concept of economic entity explains that the finances of an entity should be kept separate or…
Q: The following independent statements may be true or false. Discuss the circumstances whereby the…
A: Goodwill on Acquisition: For the purposes of accounting, goodwill is created when a buyer purchases…
Q: Assuming the Parent entity elects to measure the NCI at proportionate basis, the computation of non-…
A: Non controlling interest (NCI) : A non-controlling interest, also known as a minority interest, is…
Q: 1. Which is true regarding the Investment in Subsidiary Stock account? A. It is accounted for in…
A: Here is the answer of your first question Let's understand the basic Investment in subsidiary stock…
Q: Which is true regarding the Non controlling interest? [a] It is accounted for in the subsidiary’s…
A: Non-controlling interest is also known as a minority interest. Minority interest means held…
Q: Which of the following is not typical of the journal entries prepared by a parent company to account…
A: Parent company is the one which owns more than 50% stocks of another entity. A parent company…
Q: In computing the noncontrolling interest’s share of consolidated net income, how should the…
A: Upstream sales: The sale which is made by the subsidiary to parent is called upstream sales.…
Q: Where the parent company does not hold 100 percent equity of the subsidiary company, what portion of…
A: a. The parent company can eliminate the consolidated financial statements if it satisfies the…
Q: The Investment in a Subsidiary should be recorded on the parent’s books at the A. Fair value of the…
A: Acquisition: It is a case, when all or majority stocks of a company is purchased by another…
Q: Choose the correct. What is push-down accounting?a. A requirement that a subsidiary must use the…
A: The use of push-down accounting is made, when the parent company has acquired ownership of more than…
Q: The investment in a subsidiary should be recorded on the parent's books at the O underlying book…
A: Acquisition: It is a case, when all or majority stocks of a company is purchased by another company.…
Q: PFRS 3 must be applied when accounting for business combinations, but does not apply to: i.…
A: PFRS 3 must be applied when accounting for business combination, but does not apply to 1. On joint…
Q: ASB ASC 810-10-45-11 states that in some cases parent-entity financial statements may be needed, in…
A: The consolidation of the financial statements is done when the entity holds more than 50% in the…
Q: A subsidiary has a debt outstanding that was originally issued at a discount. At the beginning of…
A: Identify the appropriate answer for the given statement from the given choices. Option (a) Whether…
Q: In the separate financial statement of the parent company, which of the following statements…
A: The correct answer for the above mentioned question is given in the following steps for your…
Q: at acquisition date net assets of a subsidiary company are included in the consolidated financial…
A: The IAS 10 deals with the consolidation of financial statements. The process of consolidating the…
Q: How is the non-controlling interest (NCI) in the subsidiary’s profit or loss presented in the…
A: Non controlling interest is the interest a shareholder has in a company where he holds less than 50%
Q: According to AASb 10/IFRS 10, an investment in a subsidiary is not consolidated and must be measured…
A: As per IFRS 10, an entity that is concerned with providing the investment services to several…
Q: under the parent company concept of consolidated financial statements, the minority interest in net…
A: Consolidated financial statements are prepared when combining the parent company and subsidiary…
Q: Which of the following is not typical of the journal entries prepared by a parent company to account…
A: Consolidated financial statements are the financial statements of a group consisting of multiple…
Q: You are working on a consolidated trial balance of a parent and an 80% owned subsidiary. What…
A:
Q: a parent company acquires a less-than-100 percent controlling interest in a subsidiary, what portion…
A: Controlling interest in a subsidiary refers to acquiring between 50% to less than 100% of the…
Q: At the date of purchase, business combination resulting in a parent-subsidiary relationship, the…
A: Parent subsidiary relationship means when one company acquires substantial amount of shares in other…
Q: If the entity is using the equity method to account for investment in subsidiary, the entry to…
A: Solution: Under equity method of accounting, investment is recognized at cost, then share is income…
Q: Which of the following statements about pushdown accounting is correct? Select one: a. Pushdown…
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Q: Which of the following pertaining to Consolidated Financial Statements is correct? A. The…
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Q: Which of the following are considered separate financial statements? a. Those presented by a parent…
A: Separate financial statements are a special class of financial statements that have to be prepared…
Q: From a consolidated point of view, the intercompany gain or loss on a parent’s sale of a…
A: Solution Concept When the consolidated financial statement is to be prepared , the intercompany…
Q: Given the following information, how is goodwill from a business combination computed under PFRS…
A: Formula: Goodwill= Consideration Transferred +Amount of Non Controlling Interest +Fair value of…
Q: How are rights, warrants, and options of subsidiary companies treated in the computation of…
A:
Q: What is a basic premise of the acquisition method regarding accounting for a noncontrolling…
A: Consolidated financial statements: When an investor company holds above 50% in the outstanding stock…
Q: Choose the correct. In computing the noncontrolling interest’s share of consolidated net income, how…
A: Upstream sales: The sale which is made by the subsidiary to parent is called upstream sales.…
Q: Identify appropriate placements for the components of the non controlling interest in consolidated…
A: Acquisition: The acquisition refers to the business combination when one entity or organization…
Q: In the consolidated statement of comprehensive income to be prepared by the parent corporation,…
A: A business combination is defined as an entity obtaining control of one or more businesses. The most…
Q: Which of the following are not related parties? a. A parent and its subsidiary b. Two or more…
A: Related parties are those parties which are having relation with each other. Like the relationship…
Q: The noncontrolling interest represents an outside ownership in a subsidiary that is not attributable…
A: Answer:
Q: In connection with the examination of the consolidated financial statements Mott Industries,…
A: Auditor's report should be clear having opening , scope and opinion paragraphs. Opinion of auditor…
Q: Which of the following statements is not correct in relation to consolidation accounting key terms?…
A: Parent and subsidiary are two types of companies. Parent company is that company who has control…
Q: How is the amount assigned to the non-controlling interest normally determined when a consolidated…
A:
Q: How is non-controlling interest in the subsidiary’s net assets presented in the consolidated…
A: Non-Controlling Interest:- It is also known as "minority interest", these are the owner of less than…
Q: Which of the following regarding the preparation of Consolidated Financial Statement is correct? A.…
A: As per IFRS 10 consolidated financial statements are to be prepared to enable users to get overall…
Q: In a share acquisition business combination resulting in a parent- subsidiary relationship, the…
A: The consolidated worksheet includes the book value of parent and subsidiary accounts along with the…
Q: (a) Where the parent company does not hold 100 percent equity of the subsidiary company, what…
A: “Hey, since there are multiple sub-parts posted, we will answer first three sub-parts. If you want…
Q: Under the parent company concept of consolidated financial statements, the minority interest in net…
A: A company is said to have a minority interest in another company if the percentage of control held…
Do you think the FASB made the correct decision in requiring consolidated financial statements to recognize all subsidiary's assets and liabilities at fair value regardless of the percentage ownership acquired by the parent?
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- The following independent statements may be true or false. Discuss the circumstances whereby the statement is true and the circumstances whereby it is false. (a) Goodwill on consolidation in the Consolidated Statement of Financial Position is the difference between consideration paid by the Parent and the Parent's share of fair value of identifiable net assets of a partially-owned Subsidiary.Choose the correct. What is a basic premise of the acquisition method regarding accounting for noncontrolling interest?a. Consolidated financial statements should be primarily for the benefit of the parent company’s stockholders.b. Consolidated financial statements should be produced only if both the parent and the subsidiary are in the same basic industry.c. A subsidiary is an indivisible part of a business combination and should be included in its entirety regardless of the degree of ownership.d. Consolidated financial statements should not report a noncontrolling interest balance because these outside owners do not hold stock in the parent company.What is a basic premise of the acquisition method regarding accounting for a noncontrolling interest?a. Consolidated financial statements should be primarily for the benefit of the parent company’s stockholders.b. Consolidated financial statements should be produced only if both the parent and the subsidiary are in the same basic industry.c. A subsidiary is an indivisible part of a business combination and should be included in its entirety regardless of the degree of ownership.d. Consolidated financial statements should not report a noncontrolling interest balance because these outside owners do not hold stock in the parent company.
- In accordance with PFRS 2, Share-based Payment, how should an entity recognize the change in fair value of the liability in respect of a cash-settled share-based payment transaction? Group of answer choices Do not recognize in the financial statements but disclose in the notes thereto. Recognize in other comprehensive income. Recognize in the statement of changes in entity. Recognize in profit or loss.In the consolidated statement of comprehensive income to be prepared by the parent corporation, which of the following items will affect both consolidated net income attributable to parent and non-controlling interest in net income? Impairment loss on goodwill recognized when the noncontrolling interest is measured at proportionate share of fair value of net assets of subsidiary. Amortization of difference between fair value and book value of liability of subsidiary. Realization of unrealized gain or (loss) from sale of parent company to subsidiary company. Recognition of gain on bargain purchase arising from business combination.Choose the correct. The noncontrolling interest represents an outside ownership in a subsidiary that is not attributable to the parent company. Where in the consolidated balance sheet is this outside ownership interest recognized?a. In the liability section.b. In a mezzanine section between liabilities and owners’ equity.c. In the owners’ equity section.d. The noncontrolling interest is not recognized in the consolidated balance sheet.
- 1. PAS 28 defines an ‘associate’ as Choices An entity that controls one or more entities. An entity over which the investor has significant influence. A joint arrangement whereby the parties that have joint control of the arrangement have rights to the net assets of the arrangement. An entity that is controlled by another entity. 2. In accordance with PAS 1, which of the following gains or losses from reclassification of financial assets need not be presented separately in the profit or loss section or the statement of profit or loss? Choices None of these. Reclassification of financial assets out of the FVTOCI measurement category to FVTPL. Reclassification of financial assets out of the amortized cost measurement category to FVTPL. Reclassification of financial assets out of the FVTPL measurement category.Choose the correct. In computing the noncontrolling interest’s share of consolidated net income, how should the subsidiary’s net income be adjusted for intra-entity transfers? a. The subsidiary’s reported net income is adjusted for the impact of upstream transfers prior to computing the noncontrolling interest’s allocation. b. The subsidiary’s reported netincome is adjusted for the impact of all transfers prior to computing the noncontrolling interest’s allocation. c. The subsidiary’s reported net income is not adjusted for the impact of transfers prior to computing the noncontrolling interest’s allocation. d. The subsidiary’s reported net income is adjusted for the impact of downstream transfers prior to computing the noncontrolling interest’s allocation.Which of the following statements about pushdown accountling is correct? Select one: a. Pushdown accounting occurs when a subsidiary incurs the parent company's transaction costs related to the acquisition of the subsidiary. O b. On the date a parent company obtains control of a subsidiary, pushdown accounting will result in a subsidiary's pre-consolidation individual net assets being reported at fair value, consistent with FASB ASC 805. C. When a subsidiary applies pushdown accounting, the parent company's Equity Investment account is pushed down and reported on the subsidiary's balance sheet. d. When a subsidiary applies pushdown accounting, the parent company is no longer required to issue consolidated financial statements.
- What is the correct method for treating a vesting differential linked to the acquisition of shares? privileged rights of the subsidiary by the parent company? Select an answer: a. It must be allocated to identifiable net assets or goodwill. b. It must be distributed in proportion to the identifiable assets and liabilities of the subsidiary. c. It must be charged to consolidated retained earnings or credited to contributed surplus. d. It must be taken care of in the current year.How is the non-controlling interest (NCI) in the subsidiary’s profit or loss presented in the consolidated statement of profit or loss? a. Any of these as a matter of accounting policy choice. b. The consolidated profit or loss pertains to the parent only, the NCI in profit is presented separately. c. Not presented but disclosed either as a footnote or in the notes. The consolidated profit or loss pertains to the parent only. d. As part of the group’s profit or loss. The group’s profit or loss is then attributed to both the owners of the parent and NCI.Choose the correct. What is push-down accounting?a. A requirement that a subsidiary must use the same accounting principles as a parent company.b. Inventory transfers made from a parent company to a subsidiary.c. A subsidiary’s recording of the fair-value allocations as well as subsequent amortization.d. The adjustments required for consolidation when a parent has applied the equity method of accounting for internal reporting purposes.