PFRS 3 must be applied when accounting for business combinations, but does not apply to: i. Formation of a joint arrangement ii. The acquisition of an asset or group of assets that is not a business although general guidance is provided on how such transactions should be accounted for ii. Combination of entities or businesses under common control iv. Acquisitions by an investment entity of a subsidiary that is required to be measured at fair value through profit or loss under PFRS 10 Consolidated Financial Statements v. Mutual entities vi. Not-for-profit organizations * O O , i, , v, and vi O L I, ii, and iv O , i, i, v, and v O , i, i, iv, v, and iv

PFRS 3 must be applied when accounting for business combinations, but does not apply to: i. Formation of a joint arrangement ii. The acquisition of an asset or group of assets that is not a business although general guidance is provided on how such transactions should be accounted for ii. Combination of entities or businesses under common control iv. Acquisitions by an investment entity of a subsidiary that is required to be measured at fair value through profit or loss under PFRS 10 Consolidated Financial Statements v. Mutual entities vi. Not-for-profit organizations * O O , i, , v, and vi O L I, ii, and iv O , i, i, v, and v O , i, i, iv, v, and iv

Auditing: A Risk Based-Approach (MindTap Course List)

11th Edition

ISBN:9781337619455

Author:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg

Publisher:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg

Chapter6: Audit Evidence

Section: Chapter Questions

Problem 15CYBK

See similar textbooks

Similar questions

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.
PFRS 3 must be applied when accounting for business combinations, but does not apply to:i. Formation of a joint arrangementii. The acquisition of an asset or group of assets that is not a business although general guidance is provided on how such transactions should be accounted foriii. Combination of entities or businesses under common controliv. Acquisitions by an investment entity of a subsidiary that is required to be measured at fair value through profit or loss under PFRS 10 Consolidated Financial Statementsv. Mutual entitiesvi. Not-for-profit organizations i, ii, iii, iv, v, and iv i, ii, iii, and iv i, ii, iii, iv, and vi i, ii, iii, iv, and v
Which consolidation method should be used in preparing consolidated financial statements in accordance with IFRS? A. Proportionate consolidation method.B. Either identifiable net assets or fair value enterprise method.C. New entity method.D. Parent company method.
The term ‘business combination’ is defined in AASB 3/IFRS 3 Business Combinations to include: I. True mergers or mergers of equals. II. An acquisition of a non-current asset. III. A transaction or other event in which a group of assets is acquired by an entity. IV. A transaction or other event in which an acquirer obtains control of one or more businesses. a. I. and II. only. b. I. and IV only. c II., III. and IV only. d. I., II., III. and IV
S1: The preparation of consolidated financial statements after acquisition is materially different concept from preparing them in the acquisition date in the sense that reciprocal accounts are eliminated and remaining balances are combined. S2: All revenues and expenses of individual consolidating companies arising from transactions and actions with affiliated companies are included in the consolidated financial statements. A. Only S2 is correct B. Both statements are incorrect C. Only S1 is correct D. Both statements are correct
Consolidation financial statements are prepared when a parent-subsidiary relationship exists in recognition of the accounting principle concept of: a. Reliability b. Entity c. Materiality d. Going Concern
An entity shall determine whether a transaction or other event is a business combination by applying the definition in PFRS 3, which requires that: a. All of the combining entities or businesses are ultimately controlled by the same party or parties both before and after the business combination. b. All of the combining entities transfer their net assets, or the owners of those entities transfer their equity interests, to a newly formed entity. c. The assets acquired and the liabilities assumed constitute a business. d. All of the above.
S1: The preparation of consolidated financial statements after acquisition is materially different concept from preparing them in the acquisition date in the sense that reciprocal accounts are eliminated and remaining balances are combined. S2: All revenues and expenses of individual consolidating companies arising from transactions and actions with affiliated companies are included in the consolidated financial statements. Only S2 is correct Both statements are correct Both statements are incorrect Only S1 is correct
Statement 1: The preparation of consolidated financial statements after acquisition is materially different concept from preparing them in the acquisition date in the sense that reciprocal accounts are eliminated and remaining balances are combined. Statement 2: All revenues and expenses of individual consolidating companies arising from transactions and actions with affiliated companies are included in the consolidated financial statements. a. Only Statement 1 is correct b. Both statements are correct c. Only Statement 2 is correct d. Both statements are incorrect
In a business combination, an acquirer's interest in the fair value of the net assets acquired exceeds the consideration transferred in the combination. Under PFRS 3 Business Combinations, the acquirer should A. recognize the excess immediately in profit or los B. recognize the excess immediately in other comprehensive income C. reassess the recognition and measurement of the net assets acquired and the consideration transferred, then recognize any excess immediately in other comprehensive income D. reassess the recognition and measurement of the net assets acquired and the consideration transferred, then recognize any excess immediately in profit or loss
Which of the following pertaining to Consolidated Financial Statements is correct?A. The preparation of Consolidated Financial Statements means that the companiesinvolved cease to operate as separate legal entities.B. The preparation of Consolidated Financial Statements is at the Parent Company'sdiscretion.C. When one company has control over another, Consolidated Financial Statementsmust be prepared for the combined entity.D. Before preparing Consolidated Financial Statements, a subsidiary's FinancialStatements prior to the date of acquisition must be restated.
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.