Question 1

Under the entity concept of consolidation the NCI is recognised as a liability.

Accepted Answer

A) True 
 B)False  False

Question 2

-Using the fair value (100% goodwill)method the goodwill on acquisition is:

Accepted Answer

A)  $140,000 
B)  $186,000 
C)  $70,000 
D)  none of the above 
A)  $140,000 
B)  $186,000 
C)  $70,000 
D)  none of the above C

Question 3

Consistent with the entity concept,full consolidation requires that:

Accepted Answer

A)  the parent ownership proportion of the subsidiary income, expenses, assets, liabilities and equity are included in the consolidated financial statements 
B)  the non controlling ownership interests are included in the consolidated financial statements 
C)  The full amount of income, expense, assets, liabilities and equity are included in the consolidated financial statements 
D)  none of the above 
A)  the parent ownership proportion of the subsidiary income, expenses, assets, liabilities and equity are included in the consolidated financial statements 
B)  the non controlling ownership interests are included in the consolidated financial statements 
C)  The full amount of income, expense, assets, liabilities and equity are included in the consolidated financial statements 
D)  none of the above C

Question 4

The shareholders of the parent entity in a group are entitled to:

Accepted Answer

A)  total profits of all group members 
B)  parent entity interest in consolidated group profit 
C)  non controlling interest in consolidated group profit 
D)  none of the above 
A)  total profits of all group members 
B)  parent entity interest in consolidated group profit 
C)  non controlling interest in consolidated group profit 
D)  none of the above

Question 5

Under current accounting standards it is not possible to record a negative NCI in consolidated financial statements.

Accepted Answer

A) True 
 B)False

Question 6

Which of the following statements is correct?

Accepted Answer

A)  The minority interest cannot have the majority of the equity in a subsidiary since it would not then be a minority interest. 
B)  The minority interest cannot have the majority of voting power in a subsidiary since a majority would give that interest the power to control a subsidiary. 
C)  The minority interest may have the majority of the equity and a majority of the voting power in a subsidiary but still remain a minority interest. 
D)  None of the above. 
A)  The minority interest cannot have the majority of the equity in a subsidiary since it would not then be a minority interest. 
B)  The minority interest cannot have the majority of voting power in a subsidiary since a majority would give that interest the power to control a subsidiary. 
C)  The minority interest may have the majority of the equity and a majority of the voting power in a subsidiary but still remain a minority interest. 
D)  None of the above.

Question 7

In the calculation of NCI share of profit consolidation adjusting entries which do not change group profit will be:

Accepted Answer

A)  adjusted if they affect the subsidiary's reported profit 
B)  adjusted if the affect the parent entity's reported profit 
C)  not adjusted 
D)  none of the above 
A)  adjusted if they affect the subsidiary's reported profit 
B)  adjusted if the affect the parent entity's reported profit 
C)  not adjusted 
D)  none of the above

Question 8

The consolidation technique of 'NCI allocation' is based on the proposition that non controlling shareholders have an ownership interest in group equity

Accepted Answer

A) True 
 B)False

Question 9

The shareholders' interest in a subsidiary that is termed a 'minority interest' derives its name because,in comparison to the interest held be the shareholders of the parent entity,the minority interest:

Accepted Answer

A)  Has less equity in the subsidiary. 
B)  Has less voting power in the subsidiary. 
C)  Has less equity and less voting power in the subsidiary. 
D)  None of the above. 
A)  Has less equity in the subsidiary. 
B)  Has less voting power in the subsidiary. 
C)  Has less equity and less voting power in the subsidiary. 
D)  None of the above.

Question 10

Where the full goodwill on acquisition is recognised in the consolidated financial statements,any impairment loss will be allocated between parent interest and NCI on the same basis as profit or loss.

Accepted Answer

The answer of Where the full goodwill on acquisition is...

Question 11

Under full consolidation only the income,expenses,assets,liabilities and equity of wholly owned subsidiaries are included in the consolidated financial statements.

Accepted Answer

A) True 
 B)False

Question 12

Where the shareholder's equity of a subsidiary is negative:

Accepted Answer

A)  the NCI will be included as part of the parent interests 
B)  the NCI will be shown as a separate amount in the consolidated accounts 
C)  NCI is ignored for consolidation purposes 
D)  none of the above 
A)  the NCI will be included as part of the parent interests 
B)  the NCI will be shown as a separate amount in the consolidated accounts 
C)  NCI is ignored for consolidation purposes 
D)  none of the above

Question 13

How is the fair value of the shares representing an NCI calculated in the absence of an active market for the company's shares?

Accepted Answer

Calculation of fair value of shares repr

Question 14

-Under the fair value (100% of goodwill)method used in Question 14 the NCI in goodwill is:

Accepted Answer

A)  $34,000 
B)  $104,000 
C)  $150,000 
D)  none of the above 
A)  $34,000 
B)  $104,000 
C)  $150,000 
D)  none of the above

Question 15

Why does AASB3 allow a choice in the measurement of NCI at the date of acquisition?

Accepted Answer

Measurement of NCI at date of acquisitio

Question 16

Non controlling interest at date of acquisition must be measured using:

Accepted Answer

A)  the fair value method 
B)  the proportionate interest goodwill method 
C)  either A or B 
D)  none of the above 
A)  the fair value method 
B)  the proportionate interest goodwill method 
C)  either A or B 
D)  none of the above

Question 17

The non controlling interest share of a subsidiary's retained earnings will be calculated as a percentage of:

Accepted Answer

A)  opening balance of retained earnings 
B)  profit for the period 
C)  dividend and other appropriations 
D)  the sum of all the above 
A)  opening balance of retained earnings 
B)  profit for the period 
C)  dividend and other appropriations 
D)  the sum of all the above

Question 18

The parent interest (PI)in equity will be calculated as follows:

Accepted Answer

A)  consolidated equity less non controlling interest 
B)  parent equity plus PI share of subsidiary equity 
C)  parent equity plus non controlling interest 
D)  none of the above 
A)  consolidated equity less non controlling interest 
B)  parent equity plus PI share of subsidiary equity 
C)  parent equity plus non controlling interest 
D)  none of the above

Question 19

Outline how NCI will be disclosed in the consolidated statement of financial position,
statement of comprehensive income and statement of changes in equity.

Accepted Answer

Disclosure of NCI:
- Statement of financ

Question 20

In the preparation of consolidated financial statements,the measurement of a minority interest in the shareholders' equity of a subsidiary at the reporting date may be affected by:

Accepted Answer

A)  Management fees charged to the subsidiary by the parent entity. 
B)  Unrealised profits arising from sales of inventories in the previous period by the subsidiary to another subsidiary in the same group. 
C)  Consolidation adjustments made against the retained earnings of the subsidiary at the end of the previous period. 
D)  None of the above. 
A)  Management fees charged to the subsidiary by the parent entity. 
B)  Unrealised profits arising from sales of inventories in the previous period by the subsidiary to another subsidiary in the same group. 
C)  Consolidation adjustments made against the retained earnings of the subsidiary at the end of the previous period. 
D)  None of the above.

Under the entity concept of consolidation the NCI is recognised as a liability.

-Using the fair value (100% goodwill)method the goodwill on acquisition is:

Consistent with the entity concept,full consolidation requires that:

The shareholders of the parent entity in a group are entitled to:

Under current accounting standards it is not possible to record a negative NCI in consolidated financial statements.

Which of the following statements is correct?

In the calculation of NCI share of profit consolidation adjusting entries which do not change group profit will be:

The consolidation technique of 'NCI allocation' is based on the proposition that non controlling shareholders have an ownership interest in group equity

The shareholders' interest in a subsidiary that is termed a 'minority interest' derives its name because,in comparison to the interest held be the shareholders of the parent entity,the minority interest:

Where the full goodwill on acquisition is recognised in the consolidated financial statements,any impairment loss will be allocated between parent interest and NCI on the same basis as profit or loss.

Under full consolidation only the income,expenses,assets,liabilities and equity of wholly owned subsidiaries are included in the consolidated financial statements.

Where the shareholder's equity of a subsidiary is negative:

How is the fair value of the shares representing an NCI calculated in the absence of an active market for the company's shares?

-Under the fair value (100% of goodwill)method used in Question 14 the NCI in goodwill is:

Why does AASB3 allow a choice in the measurement of NCI at the date of acquisition?

Non controlling interest at date of acquisition must be measured using:

The non controlling interest share of a subsidiary's retained earnings will be calculated as a percentage of:

The parent interest (PI)in equity will be calculated as follows:

Outline how NCI will be disclosed in the consolidated statement of financial position, statement of comprehensive income and statement of changes in equity.

In the preparation of consolidated financial statements,the measurement of a minority interest in the shareholders' equity of a subsidiary at the reporting date may be affected by:

Text Objectives and Introduction to Consolidation

Principles of Consolidation

Fair Value Adjustments and Tax Effects

Intra-Group Transactions

Partly-Owned Subsidiaries: Indirect Non-Controlling Interest

Consolidated Cash Flow Statements

Accounting for Joint Arrangements

Accounting for Associates and Joint Ventures: the Equity Method

Translation and Consolidation of Foreign Currency Financial Statements

Segment Reporting by Diversified Entities

Filters

Exam 5: Non-Controlling Interest

Under the entity concept of consolidation the NCI is recognised as a liability.

-Using the fair value (100% goodwill)method the goodwill on acquisition is:

Consistent with the entity concept,full consolidation requires that:

The shareholders of the parent entity in a group are entitled to:

Under current accounting standards it is not possible to record a negative NCI in consolidated financial statements.

Which of the following statements is correct?

In the calculation of NCI share of profit consolidation adjusting entries which do not change group profit will be:

The consolidation technique of 'NCI allocation' is based on the proposition that non controlling shareholders have an ownership interest in group equity

The shareholders' interest in a subsidiary that is termed a 'minority interest' derives its name because,in comparison to the interest held be the shareholders of the parent entity,the minority interest:

Where the full goodwill on acquisition is recognised in the consolidated financial statements,any impairment loss will be allocated between parent interest and NCI on the same basis as profit or loss.

Under full consolidation only the income,expenses,assets,liabilities and equity of wholly owned subsidiaries are included in the consolidated financial statements.

Where the shareholder's equity of a subsidiary is negative:

How is the fair value of the shares representing an NCI calculated in the absence of an active market for the company's shares?

-Under the fair value (100% of goodwill)method used in Question 14 the NCI in goodwill is:

Why does AASB3 allow a choice in the measurement of NCI at the date of acquisition?

Non controlling interest at date of acquisition must be measured using:

The non controlling interest share of a subsidiary's retained earnings will be calculated as a percentage of:

The parent interest (PI)in equity will be calculated as follows:

Outline how NCI will be disclosed in the consolidated statement of financial position, statement of comprehensive income and statement of changes in equity.

In the preparation of consolidated financial statements,the measurement of a minority interest in the shareholders' equity of a subsidiary at the reporting date may be affected by:

Text Objectives and Introduction to Consolidation

Principles of Consolidation

Fair Value Adjustments and Tax Effects

Intra-Group Transactions

Partly-Owned Subsidiaries: Indirect Non-Controlling Interest

Consolidated Cash Flow Statements

Accounting for Joint Arrangements

Accounting for Associates and Joint Ventures: the Equity Method

Translation and Consolidation of Foreign Currency Financial Statements

Segment Reporting by Diversified Entities

Filters