Exam 15: Consolidation: Controlled Entities

AASB 10 Consolidated Financial Statements,defines a 'parent' and a 'subsidiary' as:

For one entity to control another entity,the percentage of share ownership held by the controlling entity:

Which is not one of the three elements of control?

A single set of financial statements,that combines the separate sets of financial statements for a number of entities,which are managed as a single economic entity,is known as:

Explain what occurs when a business combination takes place.

Discuss the concept of rights in the context of power and control

The process of aggregating individual sets of financial statements to produce consolidated financial statements requires:

Which of the following statements is not correct?

The entity that is represented by a single set of consolidated financial statements known as a consolidated financial report,is:

Which of the following is correct in relation to rights in the context of control?

All parent entities are required to present consolidated statements unless the following conditions apply to them: I The parent is a wholly owned subsidiary. II The parent is a partly owned subsidiary and its owners do not object to the non-presentation of consolidated financial statements. III The parent's debt or equity securities are traded in a public market. IV The parent is not in the process of applying to issue any securities in a public market.

Truong Limited acquired 60% of the shares of Quang Limited through the Australian Securities Exchange.The share acquisition cost Truong Limited $500 000.As a result of the share acquisition,Truong Limited gained control over Quang Limited.In its accounting records,Truong will recognise:

Two entities A Limited and B Limited together form a third entity,C Limited.C Limited acquires A Limited and B Limited.In this situation,AASB 3 Business Combinations,adjudges that:

A group of entities comprised of A Limited (parent entity),B Limited (subsidiary entity)and C Limited (subsidiary entity)have the following Accounts receivable balances: -A Limited $12 000 -B Limited $15 000 -C Limited $10 000 The consolidated financial statements show the following amount as the consolidated Accounts receivable balance:

Explain the key content of AASB 10.

According to AASB 12 Disclosure of Interests in Other Parties,parent entities are required to disclose: I Summarised financial information about each subsidiary II A list of significant investments in subsidiaries. III If the subsidiary is not wholly owned,the names of all other members. IV The country of incorporation of subsidiaries.

If a parent entity chooses not to prepare consolidated financial statements,AASB 127 Separate Financial Statements,requires the following disclosures in the separate financial statements of the parent: I The name,country of residence and voting power of the directors of the parent. II That the exemption from consolidation has been used. III A list of significant investments including the proportion of ownership. IV A description of the method used to account for the investments.

The key characteristic that determines which entities financial statements should be combined into a set of consolidated financial statements is:

Explain what criteria determines whether or not an entity is included in a set of consolidated financial statements.

Which of the following statements is correct? a.The legal acquirer under AASB 3 and the accounting acquirer under AASB 10 do not have to be the same entity. b.The entity identified under AASB 10 as the parent will be the acquirer under AASB 3. c.The legal acquirer is determined under AASB 3 as the entity that issues the equity instruments. d.The accounting acquirer is the entity that becomes the controlling entity.