ACA Financial Accounting and Reporting 2

Question 1

A parent company owns 80% of a subsidiary.
The subsidiary reports profit after tax of £100,000.
In the consolidated statement of comprehensive income, what amount is shown as the non-controlling interest (NCI) share of profit?

Accepted Answer

£20,000

Answer

£80,000

Answer

£100,000

Answer

£0

Question 2

Under FRS 102, when should an entity recognise a contingent liability?

Accepted Answer

As a disclosure in the notes to the financial statements only (not recognised in the statement of financial position)

Answer

As a provision in the statement of financial position

Answer

It should be ignored entirely

Answer

As revenue in the statement of comprehensive income

Question 3

In a consolidated statement of financial position, how is goodwill arising on acquisition calculated under FRS 102?

Accepted Answer

Fair value of consideration paid minus the fair value of the subsidiary's identifiable net assets acquired

Answer

Fair value of consideration paid minus the book value of the subsidiary's total assets

Answer

The total assets of the subsidiary at the date of acquisition

Answer

The market capitalisation of the subsidiary

Question 4

Under FRS 102, what is the maximum useful life over which goodwill must be amortised if the entity cannot make a reliable estimate?

Accepted Answer

5 years

Answer

10 years

Answer

20 years

Answer

Indefinite — no amortisation required

Question 5

A company holds an investment property under FRS 102. How should it be measured at each reporting date?

Accepted Answer

At fair value, with changes in fair value recognised in profit or loss

Answer

At cost less accumulated depreciation

Answer

At the lower of cost and net realisable value

Answer

At cost less impairment only

Question 6

Which of the following transactions would be eliminated on consolidation when preparing group financial statements?

Accepted Answer

Intra-group sales from the parent to the subsidiary

Answer

Sales made by the subsidiary to external customers

Answer

A loan from a bank to the parent company

Answer

Dividends received from external investments