Deck 28: Alternative Concepts on Consolidation and Business Combinations

Question 1

Which of these is NOT a difference between carry over accounting and acquisition accounting?

A)Carry over accounting requires an acquisition date,acquisition accounting doesn't
B)Carry over accounting does not recognise goodwill,acquisition accounting does
C)Carry over accounting does not require revaluation of items at fair value,but acquisition accounting does
D)Carry over accounting involves combining items at book value,whereas acquisition accounting requires combining at fair values.

Answer 1

A

Question 2

Which of these is not an alternative to acquisition accounting?

A)Entity accounting
B)Pooling of interests accounting
C)Equity accounting
D)Carry over accounting

Answer 2

A

Question 3

Which is NOT true about pooling of interests accounting for business combinations?

A)IFRS 3 which replaced IAS 22 confirmed use of pooling of interests for true mergers
B)The assets and liabilities of entities are combined on the basis of their book values
C)It was identified by IAS 22
D)It is required in a situation of ' uniting of interests'

Answer 3

A

Question 4

The IFRS allows use of all alternative concepts of accounting for business combinations

Question 5

Which is NOT true about proportional consolidation?

A)There is no non- controlling interest
B)It is allowed under IFRS 11 for a parent - subsidiary relationship
C)it is not allowed under IFRS 11 for a parent- subsidiary relationship
D)It is a traditional option in accounting for joint ventures.

Question 6

Which of the following is not a feature of the entity concept?

A)That the group is accounted for as a unit,and makes no distinction between shareholders
B)That the Consolidated financial statement is prepared to be primarily of use to the shareholders of the parent entity
C)Non-controlling interests are part of equity
D)Net comprehensive income includes the net income attributable to all shareholders

Question 7

IFRS 3 is more recent than IAS 22

Question 8

IAS 28 and 31 both apply to Equity Accounting

Question 9

An advantage of pooling of interests accounting is that it provides superior quality information when compared to acquisition acounting

Question 10

IFRS 3 applies the parent concept when preparing consolidated financial statements