Consolidation and Group Accounts Flashcards

Under IFRS 10, when does an investor control an investee?

Answer: When it has power over the investee, exposure to variable returns, and ability to use power to affect those returns

IFRS 10 defines control through three cumulative elements: power, variable returns, and the link between them.

Under IFRS 3, goodwill arising on a business combination is measured as:

Answer: Consideration transferred plus non-controlling interest less fair value of net identifiable assets acquired

IFRS 3 calculates goodwill as consideration + NCI – fair value of net identifiable assets at the acquisition date.

Under IFRS 3, identifiable assets acquired and liabilities assumed in a business combination are recognised at:

Answer: Fair value at the acquisition date

IFRS 3 requires all identifiable assets and liabilities to be remeasured to fair value at the acquisition date.

Under IFRS 10, non-controlling interests (NCI) in a subsidiary are presented:

Answer: Within equity, separately from the parent's equity

IFRS 10 requires NCI to be classified as equity but disclosed separately from the controlling interest.

Under IAS 28, the equity method is used to account for investments in:

Answer: Associates and joint ventures

IAS 28 requires the equity method for investments in associates (significant influence) and joint ventures.

Under IAS 28, significant influence is presumed when an investor holds:

Answer: 20% to 50% of voting power

IAS 28 creates a rebuttable presumption of significant influence between 20% and 50% voting rights.