Exam 18: Consolidation: Controlled Entities

According to AASB 12 Disclosure of Interests in Other Entities,an entity that has been designed so that voting or similar rights are not the dominant factor in deciding who controls the entity is known as a:

Entities can only classify investments in other entities as subsidiaries if they actually exercise control over the financial and operating policies of an entity.

Which of the following statements is correct?

When deciding whether or not one entity controls another entity:

Where a non-controlling interest exists in a subsidiary,AASB 12 Disclosure of Interests in Other Parties requires parent entities to disclose which of the following for each such subsidiary? I Summarised financial information about each subsidiary. II The proportion of ownership interests held by non-controlling interests. III If the subsidiary is not wholly owned,the names of all other members. IV The country of incorporation of subsidiaries.

Where an entity directly holds more than 50% of the voting rights of another entity,they are presumed to have power in accordance with AASB 10 Consolidated Financial Statements.

Eastpac Bank has lent Alexandra Ltd $500 000.Part of the loan contract prevents Alexandra from borrowing money in the future from other banks without the permission of Eastpac.As a result of this relationship:

The process of preparing consolidated financial statements requires that:

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: