The consolidation process applicable when intra-entity land transfers have occurred differs somewhat from that used for intra-entity inventory sales. What differences should be noted?

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: Discuss how intercompany transfers should be treated for consolidation purposes, in both the…

A: Inter-company transactions: Inter-Company transactions are the transactions that occur between the…

Q: Which of the following is true about intragroup transfer of property, plant and equipment (PPE) as…

A: Consolidation Statement The basic principle of consolidation the parent company taken over the…

Q: Key questions to consider when determining the appropriate consolidation adjustment entries include…

A: Consolidation adjustment entry is the accounting entry that is to be made for consolidating the…

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: Since its enactment, PSAK 22: Business Combinations must be applied to all acquisitions. Explain how…

A: Solution of (a) A business combination is when a buyer takes control of another business by way of a…

Q: Explain the impact that a net operating loss of an acquired affiliate has on consolidated figures.

A: Consolidated financial statements: These financial statements are consolidated financial statements…

Q: Which of the following intercompany inventory transfers impacts the calculation of noncontrolling…

A: While calculating the Non Controlling Interest ( NCI ) in consolidated statement , the NCI is…

Q: What are some of the implications of allowing the group to have two options in accounting for…

A: Goodwill - It is kind of intangible assets. It is generally associated with the acquire of one…

Q: In the context of Merger & Acquisition, What is the definition for Social Issues and why is it…

A: Mergers and acquisitions are business reorganization. Companies merge together to form a single…

Q: A component of an entity when it has actually disposed of the operation and when operation meets the…

A: Answer-  As per IFRS 5-  Non-current Assets Held for Sale and Discontinued Operations ,  A…

Q: In governmental accounting, what is the difference between an acquisition and a merger? What…

A: The government uses a different way to report their financial statements than the private sector…

Q: Which is incorrect concerning the date of exchange in a business combination? * O The acquisition…

A: 1) The acquisition date is the date on which the acquirer effectively obtains control of the…

Q: Which of the following statements is incorrect? For each business combination, one of the combining…

A: Business: A business is an organization entirely made for earning profits or for fulfilling social…

Q: In the context of Merger & Acquisition, What is the definition for Structure and why is it…

A: A mergers and acquisition structure is a binding agreement between the two parties, which specifies…

Q: When does gain recognition accompany a business combination?a. When a bargain purchase occurs.b. In…

A: Gains: Gain can be defined as the revenue exceeding the expenses, this increases the equity.

Q: Which of the following is not considered in the determination of Total Assets after business…

A: In business combination , following are considered for determination of total assets : 1. Fair value…

Q: Which of the following is not an application of the acquisition method?

A: Answer: d) Measuring the non-controlling interest at the NCI’s proportionate share in the acquirer’s…

Q: Which of the following is not an application of the acquisition method? a. Measuring the…

A: Option a is correct.

Q: How are intra-entity inventory transfers treated on the consolidation worksheet and how are they…

A: Intra entity transfer means the sale and purchase of inventory between 2 entities of the same group.

Q: Prepare the set of consolidated financial statement of financial position on the date of acquisition…

A: Consolidated financial statements comprise of the group financial statements in which the…

Q: Which of the following is included in the computation of the consolidated balance of assets at the…

A: Goodwill as a result of the business combination

Q: Describe the presentation of the consolidated balance sheet and income statement indicating a) The…

A: Presentation of Balance Sheet and Income Statement is very crucial aspect in industry to compare and…

Q: When an entity sells a non-current asset at a profit to another entity within the same group, which…

A: Consolidation is the process in which parent company prepares financial statement with both parent…

Q: Explain the difference between pooling of interest and purchase method of accounting for…

A: Amalgamation occurs when two or more entities combine to form a new entity. It is of two types:…

Q: In a business combination, an acquirer's interest in the fair value of the net assets acquired…

A: It should be recognised as capital reserve in the statement of comprehensive income... The…

Q: An entry is necessary to eliminate the full amount of the gain on the sale of land and to reduce the…

A: SOLUTION-  A GAIN OR LOSS ON SALES DOWNSTREAM FROM PARENT TO SUBSIDIARY IS INITIALLY INCLUDED IN…

Q: Using the acquisition method for a business combination, goodwill is generally defined as Select…

A: Using the acquisition method for a business combination goodwill is defined as the investment cost…

Q: Describe a variable interest entity, a primary beneficiary, and the factors used to decide when a…

A: Variable interest entity (VIE) It refers to an arrangement where the investor has a controlling…

Q: In an acquisition where there is an exchange of assets for assets, how does the ownership structure…

A: In exchange the value of net assets may increase or decrease, all depends on the fair value of the…

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: Entity A obtained control of Entity B in a business combination. When computing for goodwill, Entity…

A: Business combination is a process in which one entity acquires the control on the operation of the…

Q: Explain what a variable interest entity is, what a major beneficiary is, and what elements are…

A: A variable interest company can be any legitimate corporate form (VIE). It might be a trust, a…

Q: Demonstrate the consolidation procedures to eliminate intra-entity sales and purchases balances.

A: Consolidation is a term used for merging of several companies of an industry. The assets,…

Q: How are intra-entity inventory gross profits created, and what consolidation entries does the…

A:

Q: acquisition where there is an exchange of assets for assets, how does the ownership structure of the…

A: Acquiree Entity is the entity whose business is taken over by other entity.

Q: Key questions to consider when determining the appropriate consolidation adjustment entries include…

A: Consolidation of the financial statement is a process of combining the financial statements of the…

Q: At acquisition date the net assests of the acquired subsidairy are included in the consolidated…

A: Consistency: Consistency principle emphasizes that companies should adhere to same accounting…

Q: intercompany transactions and debts should be treated for consolidation purposes

A: Intercompany transactions and debts in consolidation means the transactions and mutual dues between…

Q: Explain why consolidated entities defer intra-entity gross profit in ending inventory and the…

A: Despite the entry TI, the inflated ending inventory figure causes cost of goods sold to be too low…

Q: In an acquisition where control is achieved and the fair value of the consideration transferred is…

A: Acquisition:-When assets of one company acquired by another company with some holding rights.

Q: Choose the correct. When does gain recognition accompany a business combination?a. When a bargain…

A: Gains: Gain can be defined as the revenue exceeding the expenses, this increases the equity.

Consolidation

Consolidation in general examination implies an asset oscillating between well-defined methods of trading status. Consolidation is commonly known as market indecisiveness, which completes when the asset's values move forward or backward the trading structure.