The following independent statements may be true or false. Discuss the circumstances whereby the statement is true and the circumstances whereby it is false. Dividends declared by a Group (which is shown as an appropriation in the Consolidated Statement of Changes in Equity) comprises dividends declared by the Parent and dividends declared by a Subsidiary to its Non-controlling Interests.
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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.
Dividends declared by a Group (which is shown as an appropriation in the Consolidated Statement of Changes in Equity) comprises dividends declared by the Parent and dividends declared by a Subsidiary to its Non-controlling Interests.
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- Which of the following should be presented in the statement of changes in equity? A. Distributions to owners B. Investments by owners C. Change in ownership interest in subsidiary that does not result in a loss of control D. All of these are presented in the statement of changes in equityWhich of the following statements regarding IFRS consolidated financial statements is/are correct: (i) An entity that has equity investments in one or more other entities is required to present consolidated financial statements (ii) A parent whose debt or equity instruments are not traded in a public market is not required to present consolidated financial statements (iii) Consolidated financial statements present the assets, liabilities, equity, income, expenses and cash flows of the parent and its subsidiaries as those of a single economic entitythe consolidated statement of changes in equity is prepared by consolidating the separate statements of changes in equity of the parent and its subsidiaries. (a) True (b) False
- Choose the incorrect statement below: A. Retained earnings are the funds contributed by shareholders in excess of par or stated value.B. Equity is defined as the residual interest in the assets of an entity after deducting all of the liabilities.C. Conversion of preference shares into ordinary shares directly affects retained earnings.D. The statement of changes in equity is a formal statement that shows the movements in the elements or components of the shareholders' equity.Dividends are recognized in profit or loss only when a. the entity's right to receive payment of the dividend is established b. it is probable that the economic benefits associated with the dividend will flow to the entity c. the amount of the dividend can be measured reliably d. all of the above.Which of the following statements is TRUE regarding the equity method? A. The equity method is used for reporting gains or losses for non-strategic investments. B. The investor's share of the associate's dividends declared is reported as revenue. C. The investor's investment in the associate changes in direct relation to the changes taking place in the associate's equity accounts. D. The equity method reports unrealized gains and losses on revaluations to fair value in net income.
- Dividends are recognized in profit or loss only when: a. It is probable that the economic benefits associated with the dividend will flow to the entity. b. The amount of the dividend can be measured reliably. c. All of these. d. The entity’s right to receive payment of the dividend is established.The following statements are true regarding dividends. Which of the following is incorrect? a) Dividends are distributions of earnings or capital to shareholders in proportion to their shareholdings. b) If an entity has a deficit, paying dividends is still considered legal. c) Liquidating dividends are distributions of capital to shareholders in proportion to their shareholdings. d) The common forms of dividends out of earnings are cash dividend, property dividend and share dividend.Which of the following are considered separate financial statements? a. Those presented by a parent in addition to the consolidated financial statements, in compliance with a regulatory requirement. b. Those presented by an entity, which does not have a subsidiary or associate and is not a venturer in jointly controlled entity. c. Those presented by an entity which does not have any equity interest in another entity. d. Financial statements of an entity that applies the equity method.
- Under the equity method, dividends received from the affiliated company are not recorded as revenue. Recording dividends as revenue would involve double counting. Explain.Which statement is incorrect? * A. EPS disclosures are required for entities whose ordinary shares are publicly traded as well as entities that are in the process of issuing ordinary shares in the public market. B. When an entity issues both consolidated ad separate financial statements, the EPS information is required for the consolidated financial statements only. C. In computing basic EPS, the amount of preference dividends on noncumulative preference shares for the period should be deducted from net income whether declared or not D. In computing the weighted average of shares outstanding, when a share dividend or share split occurs, the additional shares are considered outstanding at the beginning of the earliest year reported. E. none of the aboveHow is the Non-Controlling Interest displayed in a consolidated balance sheet? a. As a separate item in the stockholder’s equity section b. By means of a note to consolidated financial statements c. As a separate item between the liabilities and stockholder’s equity d. As a deduction from goodwill, if any e. Non-controlling interest is never presented in consolidated balance sheet.