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Which of the following statements is correct?
Statement 1: Any unrealized profit or loss made by the subsidiary should be eliminated from its profit.
Statement 2: only the group portion of any unrealized profit need to be eliminated.
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- Which of the following accounting treatments for costs related to business combination is incorrect? Group of answer choices The costs related to issuance of financial liability at fair value through profit or loss shall be recognized as expense while those related to issuance of financial liability at amortized cost shall be recognized as deduction from the book value of financial liability or treated as discount on financial liability to be amortized using effective interest method. The costs related to issuance of stock or equity securities shall be deducted/debited from any share premium from the issue and any excess is charged to “share issuance cost” reported as contract-equity account against either (1) share premium from other share issuances or (2) retained earnings Acquisition related costs such as finder’s fees; advisory, legal, accounting, valuation and other professional and consulting fees; and general administrative costs, including the costs of maintain an…Which of the following is correct? A. The noncontrolling shareholders' claim on the subsidiary's net asset is based on the book value of the subsidiary's net assets. B. Only the parent's portion of the differences between book value and fair value of the subsidiary's assets is assigned to those assets. C. Goodwill represents the difference between the book value of the subsidiary's net assets and the amount paid by the parent to buy ownership. D. Total assets reported by the parent generally will be less than the total assets reported on the consolidated balance sheet.How should negative goodwill be shown on the consolidated financial statements of the acquirer? Group of answer choices As a liability on the statement of financial position As a loss on the statement of comprehensive income As a separate amount under shareholders' equity on the statement of financial position As a gain on the statement of comprehensive income
- Gem Company classifies a portion of its retained earnings as appropriated for loss contingencies. Consequently, the company Group of answer choices A.) May transfer to income a part of said retained earnings so appropriated. B.)Should not identify said appropriation as an appropriation of retained earnings. C.) Should show the said appropriation of retained earnings within the stockholders' equity section of the balance sheet D.)Could charge costs or losses to the said appropriated retained earnings.In the cost method of acquisition income is recognized only when the subsidiary declares dividends Select one: True FalseWhich of the following accounting treatments for costs related to business combination is incorrect? Group of answer choices a. Acquisition related costs such as finder’s fees; advisory, legal, accounting, valuation and other professional and consulting fees; and general administrative costs, including the costs of maintain an internal acquisitions department shall be recognized as expense in the Profit/Loss in the periods in which the costs are incurred. b. The costs related to issuance of financial liability at fair value through profit or loss shall be recognized as expense while those related to issuance of financial liability at amortized cost shall be recognized as deduction from the book value of financial liability or treated as discount on financial liability to be amortized using effective interest method. c. The costs related to the organization of the newly formed corporation also known as pre-incorporation costs shall be capitalized as goodwill or deduction from…
- PLEASE ANSSWER ASAP. WILL DO THUMBS UP. 1. Assuming the Parent entity elects to measure the NCI at proportionate basis, the computation of non- controlling interest in net income of subsidiary is reduced by the following, except: O Amortization of undervalued assets O All of the above O Amortization of overvalued liabilities O Impairment loss of goodwill 2. Which of the following statements is correct? Statement 1: Any unrealized profit or loss made by the subsidiary should be eliminated from its profit. Statement 2: only the group portion of any unrealized profit need to be eliminated. a. both I and II b. I c. Neither 1 or 2 d. IIWhich of the following is a characteristic of the cost method of accounting for subsidiary operations? Select one: a. Parent company net income equals consolidated net income. b. More working paper eliminations are required than for the equity method of accounting. c. Consolidated amounts differ from the comparable amounts under the equity method of accounting. d. None of the aboveWhich of the following income items may affect both Consolidated Net Income attributable to Parent and Non-Controlling Interest in Profit? * A. Gain on bargain purchase arising from business combination. B. Gain (loss) arising from intercompany sale of fixed assets from parent to subsidiary. C. Answer not given D. Amortization of excess in merchandise inventory of the acquired company. E. Impairment of a goodwill recognized using the proportionate or relevant share.
- Following IFRS, which statement is false? Group of answer choices The revaluation surplus account is a specific account reported as an unrealized gain in the statement of comprehensive income. If the revaluation initially increases the long-term operating asset's carrying value, the firm records the difference between the carrying value and the fair value (the unrealized gain) in the revaluation surplus account. The revaluation surplus account is a specific account reported in other comprehensive income (OCI) in the statement of comprehensive income. If a long-term operating asset's fair value decreases in subsequent accounting periods, after an earlier write-up, the firm reduces the revaluation surplus if it exists.If a company has elected the fair value option, where are gains and losses resulting from adjusting these accounts to fair value reported? Group of answer choices Unrealized Gains are reported as part of Other Comprehensive Income while Unrealized losses are reported as part of Net Income. Unrealized Gains and Losses are both reported as part of Net Income. Unrealized Gains are reported as part of Net Income, while Unrealized Losses are reported as part of Other Comprehensive Income. Unrealized Gains and Losses are both reported as part of Other Comprehensive Income.Which statement is true in relation to business combination achieved in stages? a. The pre-existing equity interest shall be remeasured at fair value with any resulting gain or loss included in profit or loss. b. The pre-existing interest shall be remeasured at fair value with any resulting gain or loss recognized in retained earnings. c. The pre-existing equity interest shall be remeasured at fair value with any resulting gain or loss included in other comprehensive income. d. The pre-existing interest shall not be remeasured.
