12 July 2023

Consolidations: who is really in control?

Multiple-choice questions: In order to be awarded CPD units you must answer the following five random questions correctly. If you fail the test, please reread the article before attempting the questions again.

  1. What is the current accounting standard for control?

  2. Which standard deals with the disclosures around consolidations?

  3. Which, if any, of the following statements are true? Statement 1, consolidation accounting involves adding in 100% of assets and liabilities, or statement 2, consolidation accounting involves adding in 100% of income and expenses

  4. What is the name of the accounting treatment for an associate?

  5. An entity should account for an investment as an associate with what level of power?

  6. Which of the following treatment would be applied if there is no control, joint control or significant influence?

  7. Where is the non-controlling interest shown in the statement of profit or loss?

  8. Which of these statements is included in the definition of control? Statement 1, exposure, or rights, to variable returns from its involvement with the investee, or statement 2, power over the investee

  9. Which of the following concepts identifies why intra-group transactions must be eliminated from consolidated financial statements?

  10. Which, if any, of the following statements is correct? Statement 1, IFRS 10 gives indicators of when power may exist in a relationship, or statement 2, the accounting for joint ventures and joint operations is identical

1 unit