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.

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.

SWFT Corp Partner Estates Trusts

42nd Edition

ISBN:9780357161548

Author:Raabe

Publisher:Raabe

Chapter8: Consolidated Tax Returns

Section: Chapter Questions

Problem 1BCRQ

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Which 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 entity
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.
FASB ASC 810-10-45-11 states that in some cases parent-entity financial statements may be needed, in addition to consolidated financial statements, to indicate adequately the position of bondholders and other creditors or preferred shareholders of the parent. Why parent-equity financial statements are not a valid substitute for consolidated financial statements?
How is non-controlling interest in the subsidiary’s net assets presented in the consolidated statement of financial position? a. Within equity but separately from the equity of the owners of the parents. b. Within equity as part of retained earnings. c. Any of these as a matter of accounting policy choice. d. As a mezzanine item between liabilities and equity.
Choose the correct. Which of the following is the best theoretical justification for consolidated financial statements?a. In form the companies are one entity; in substance they are separate.b. In form the companies are separate; in substance they are one entity.c. In form and substance the companies are one entity.d. In form and substance the companies are separate. (AICPA)
Which of the following are not related parties? a. A parent and its subsidiary b. Two or more subsidiaries with the same parent c. Related party transactions (in the separate financial statements) d. Related party transactions (in the consolidated financial statements)
Which of the following statements is incorrect concerning the preparation of consolidated financial statements? * A. Consolidated financial statem ents shall be prepared using uniform accounting policies for like transactions and other events in similar circumstances. b. The financial statements of the parent and its subsidiaries shall be consolidated on a line by line basis by adding together like items of assets, liabilities, equity, income and expenses. c. Intragroup balances, transactions, income and expenses shall be eliminated in full. d. When the reporting dates of the parent and a subsidiary are different, the difference shall be no more than six months.
Which of the following is NOT a required disclosure for any entity that holds an interest in a VIE? a.The significant judgments and assumptions made by an enterprise in determining whether it must consolidate a VIE and/or disclose information about its involvement in a VIE b.How the entity's involvement involvement with the VIE is perceived by Wall Street analysts c.The nature of restrictions on a consolidated VIE’s assets and on the settlement of its liabilities reported by an enterprise in its statement of financial position, including the carrying amounts of such assets and liabilities. d. The nature of, and changes in, the risks associated with an enterprise’s involvement with the vie
Which of the following is the best theoretical justification for consolidated financial statements?a. In form the companies are one entity; in substance they are separate.b. In form the companies are separate; in substance they are one entity.c. In form and substance the companies are one entity.d. In form and substance the companies are separate. (AICPA)
Consolidated financial statements are required in which ofthe following situations?a. Only when a company can exert significant influenceover another company.b. Only when a company has a passive investment inanother company.c. Only when a parent company can exercise control overits subsidiary.d. None of the above.
The economic entity assumption requires that the activities Select one: a. of a sole proprietorship cannot be distinguished from the personal economic events of its owners. b.of an entity be kept separate from the activities of its owner. c. of different entities can be combined if all the entities are corporations. d.must be reported to the Securities and Exchange Commission.
In the separate financial statement of the parent company, which of the following statements concerning the different accounting treatment for investment in subsidiary is correct? a. Under equity method, cash or property dividend received shall be recognized as dividend income by the parent. b. Under cost method, the transaction cost directly attributable to acquisition of the investment shall be expensed as incurred. c. Under fair value model, the parent company shall recognize share in net income from the subsidiary. d. Regardless of the method, the investment in subsidiary account shall be presented as noncurrent asset in the parent’s separate statement of financial position.