ADVANCED FINANCIAL ACCOUNTING IA
12th Edition
ISBN: 9781260545081
Author: Christensen
Publisher: MCG
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Question
Chapter 4, Problem 4.7Q
To determine
Consolidation:
Consolidation is the process of combining the financial statement of the parent company and its subsidiaries.
To Indicate: The portion of the fair value of subsidiaries' net assets included in the consolidated
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Choose the correct. In computing the noncontrolling interest’s share of consolidated net income, how should the subsidiary’s net income be adjusted for intra-entity transfers?
a. The subsidiary’s reported net income is adjusted for the impact of upstream transfers prior to computing the noncontrolling interest’s allocation.
b. The subsidiary’s reported netincome is adjusted for the impact of all transfers prior to computing the noncontrolling interest’s allocation.
c. The subsidiary’s reported net income is not adjusted for the impact of transfers prior to computing the noncontrolling interest’s allocation.
d. The subsidiary’s reported net income is adjusted for the impact of downstream transfers prior to computing the noncontrolling interest’s allocation.
Please concisely explain how the excess investment cost over book value is allocated.
When is the intra-entity’s profits recognized on transfers between the investor and investee?
What is the controlling interest percentage for a consolidated accounting financial statement?
The identifiable assets acquired and liabilities assumed in a business combination are generally measured at:
a. Acquisition-date fair values
b. Previous carrying amounts
c. Fair value less cost to sell
d. Cost
Chapter 4 Solutions
ADVANCED FINANCIAL ACCOUNTING IA
Ch. 4 - When is the carrying value of the investment...Ch. 4 - What is a differential? How is a differential...Ch. 4 - Prob. 4.3QCh. 4 - Prob. 4.4QCh. 4 - Prob. 4.5QCh. 4 - Prob. 4.6QCh. 4 - Prob. 4.7QCh. 4 - Prob. 4.8QCh. 4 - Prob. 4.9QCh. 4 - Prob. 4.10Q
Ch. 4 - Prob. 4.11QCh. 4 - What determines whether the balance assigned to...Ch. 4 - What does the termpushdown accountingmean?Ch. 4 - Under what conditions is push-down accounting...Ch. 4 - Prob. 4.15QCh. 4 - Prob. 4.2CCh. 4 - Prob. 4.3CCh. 4 - Prob. 4.4CCh. 4 - Prob. 4.1ECh. 4 - Prob. 4.2ECh. 4 - Prob. 4.3ECh. 4 - Prob. 4.4ECh. 4 - Prob. 4.5ECh. 4 - Prob. 4.6ECh. 4 - Prob. 4.7ECh. 4 - Prob. 4.8ECh. 4 - Prob. 4.9ECh. 4 - Prob. 4.10.1ECh. 4 - Prob. 4.10.2ECh. 4 - Prob. 4.10.3ECh. 4 - Prob. 4.10.4ECh. 4 - Prob. 4.10.5ECh. 4 - Prob. 4.11.1ECh. 4 - Prob. 4.11.2ECh. 4 - Prob. 4.11.3ECh. 4 - Prob. 4.11.4ECh. 4 - Prob. 4.12ECh. 4 - Prob. 4.13ECh. 4 - Prob. 4.14ECh. 4 - Prob. 4.15ECh. 4 - Prob. 4.16ECh. 4 - Prob. 4.17ECh. 4 - Prob. 4.18.1ECh. 4 - Prob. 4.18.2ECh. 4 - Prob. 4.18.3ECh. 4 - Prob. 4.18.4ECh. 4 - Prob. 4.18.5ECh. 4 - Prob. 4.18.6ECh. 4 - Prob. 4.19ECh. 4 - Prob. 4.20ECh. 4 - Prob. 4.21ECh. 4 - Prob. 4.22ECh. 4 - Prob. 4.23ECh. 4 - Prob. 4.24AECh. 4 - Prob. 4.25PCh. 4 - Prob. 4.26PCh. 4 - Prob. 4.27PCh. 4 - Consolidated Balance Sheet Powder Company spent...Ch. 4 - Prob. 4.29PCh. 4 - Prob. 4.30PCh. 4 - Prob. 4.31PCh. 4 - Prob. 4.32PCh. 4 - Prob. 4.33PCh. 4 - Prob. 4.34PCh. 4 - Prob. 4.35PCh. 4 - Prob. 4.36PCh. 4 - Prob. 4.37AP
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Similar questions
- How is the goodwill appearing on the statement of the financial position for a subsidiary prior to a business combination treated in the subsequent preparation of consolidated statements?arrow_forwardHow is the amount assigned to the non-controlling interest normally determined when a consolidated balance sheet is prepared immediately after a business combination?arrow_forwardThe Investment in a Subsidiary should be recorded on the parent’s books at the A. Fair value of the consideration given plus an estimated value for goodwill.B. Fair value of the subsidiary’s net identifiable assetsC. Underlying book value of subsidiary’s net assetsD. Fair value of the consideration givenarrow_forward
- 1. When preparing the consolidated financial statements, which of the followingshould be deducted from the group reserves?a) Share in associate profit b) Value of the loan from subsidiary to associate c) Group’s share of sub-subsidiary’s profit d) Value of goodwill impairment expensearrow_forwardWhich of the following represents an obligation of the company? Liability Asset Owners' Equity Liabilities of its competitorsarrow_forwardWhich of the following is not considered in the determination of Total Assets after business combination? Group of answer choices a.Book value of the acquirer’s total assets. b.Fair value of the acquiree’s total assets. c.Expenses that are actually paid in relation to business combination d.Contingent considerationarrow_forward
- When a parent company uses the equity method to account for an investment in a subsidiary, why do both the parent’s Net Income and Retained Earnings account balances agree with the consolidated totals?arrow_forwardIf the entity is using the equity method to account for investment in subsidiary, the entry to recognize dividends received from the subsidiary will: a.Be recognized in profit or loss b.Increase the carrying amount of investment c.Decrease the carrying amount of investment d.Be recognized in other comprehensive incomearrow_forwardWhich 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.arrow_forward
- When the price paid to acquire another firm is lower than the fair value of its identifiable net assets, the difference should be considered as: Select one: O Goodwill an increase to the subsidiary's assets and liabilities O. An ordinary gain ONonearrow_forwardDescribe the difference between the economic entity concept and the parent company concept approaches to the reporting of subsidiary assetsand liabilities in the consolidated financial statements on the date of the acquisition.arrow_forwardDescribe the requirement of MFRS 3 Business Combination in relation tothe revaluation of a subsidiary company's assets to fair value at theacquisition date. Give explanation base on MFRS 3 with examplearrow_forward
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