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c. The ultimate parent entity produces consolidated financial statements available for public use that comply with IFRS.
d. The parent entity is in the process of filing its financial statements with a securities commission.
8. Entity X controls an overseas entity Y. Because of exchange controls, it is difficult to transfer funds out of the country to the parent entity. X owns 100% of the
voting power of Y. How should Y be accounted for?
a. It should be excluded from consolidation and the equity method should be used.
b. It should be excluded from consolidation and stated at cost.
c. It should be excluded from consolidation and accounted for in accordance with IAS 39.
d. It is not permitted to be excluded from consolidation because control is not lost.
9. Partial sale of an investment in a subsidiary, which does not result in a change of control, is treated as follows
a. It is recorded directly in income.
b. It is recorded directly in equity.
c. It results in the adjustment of the goodwill.
d. It results in the revaluation of the whole of the equity interest.
10. Partial sale of a subsidiary, which results in the retention of significant influence so that the remaining investment constitutes an associate, is dealt with as follows:
a. It is recorded directly in income.
b. It is recorded directly in equity.
c. It results in the retained interest being measured at fair value and a gain or loss calculated on the disposal of the subsidiary.
d. It results in the revaluation of the whole of the equity interest.
11. A company has finalized the deferred tax calculation on 01/10/X9 in relation to its acquisition of a subsidiary on 01/01/X9. The adjustment required will
a. Be adjusted through income.
b. Be ignored as it is too long since the acquisition.
c. Be adjusted through equity.
d. Affect the calculation of goodwill.
12. On January 1, 20X9, A acquired a 60% interest in B for $80 million. A already held a 10% interest which had been acquired for $12 million but which was fair
valued at $15 million at January 1, 20X9. The fair value of the noncontrolling interest at January 1, 20X9, was $47 million and the fair value of the identifiable net
assets of B was $130 million. The goodwill would be as follows using the full goodwill method:
a. $1 million.
b. $12 million.
c. $35 million.
d. $38 million.
13. On January 1, 20X9, A acquired a 60% interest in B for $80 million. A already held a 10% interest which had been acquired for $12 million but which was fair
valued at $15 million at January 1, 20X9. The fair value of the noncontrolling interest at January 1, 20X9, was $47 million and the fair value of the identifiable net
assets of B was $130 million. A gain relating to the revaluation of the original equity interest would be recorded as follows:
a. $3 million.
b. $12 million.
c. $35 million.
d. $38 million.
14. Where should noncontrolling interests be presented in the consolidated statement of financial position?
a. Within long-term liabilities.
b. In between long-term liabilities and current liabilities.
c. Within the parent shareholders’ equity.
d. Within equity but separate from the parent shareholders’ equity.