1. Which of the following is the criterion for treatment of an investment as an associate?
2. IFRS 10 Consolidated Financial Statements provides a definition of control and identifies three separate elements of control. Which of the following is NOT one of these elements of control?
3. BAC Systems Co owns 100% of the share capital of the following companies. The directors are unsure of whether the investments should be consolidated.
In which of the following circumstances would the investment NOT be consolidated?
4. IFRS 3 Business Combinations requires an acquirer to measure the assets and liabilities of the acquiree at the date of consolidation at fair value. IFRS 13 Fair Value Measurement provides guidance on how fair value should be established.
Which of the following is a non relevant factor to be considered according to IFRS 13 when arriving at the fair value of a non-financial asset?
5. Which TWO of the following situations are unlikely to represent control over an investee?
1. Owning 40% of the shares but having majority of voting rights within the investee
2. Owning 51%, but the constitution requires that decisions need the unanimous consent of shareholders
3.Owning 55% and being able to elect 4 of the 7 directors
4. Owning 35% of the ordinary shares and 80% of the preference shares of the investee
6. James acquires 80% of the share capital of Williams on 1 August 2020 and is preparing its group financial statements for the year ended 31 December 2020.
How will Williams’s results be included in the group statement of profit or loss?
7. Which of the following statements regarding consolidated financial statements is correct?
8. When a bargain purchase arises, IFRS 3 Business Combinations requires that the amounts involved in computing the bargain purchase should first be reassessed. When the amount of the bargain purchase has been confirmed, how should it be accounted for?