What is the title of Working 4 B?The title of Working 4 B is NCI for the Consolidated Statement of Income. In fact, the nci do not appear on the Consolidated Statement of Income. The figure is needed to be calculated in order to complete the calculation of Working 4 A, the nci on the Consolidated Statement of Financial Position.What is the title of Working 4 A?The title of Working 4 A is NCI for the Consolidated Statement of Financial PositionWhat is the basis for the calculation of Consolidated Retained Earnings for the Consolidated Statement of Financial Position?The basis for the calculation of Consolidated Retained Earnings for the Consolidated Statement of Financial Position is:* the parent entitys own retained earnings, plus* the parents share of the subsidiarys post-acquisition retained earnings, less* the parents share of any impairment of goodwill

What is the basis of the calculation of the non-controlling interest investment for the Consolidated Statement of Financial Position (W4A)?The basis of the calculation of the non-controlling interest investment for the Consolidated Statement of Financial Position (W4A) is:-* value at date of acquisition, plus* share of subsidiarys post acquisition retained earnings, less* share of any impairment of goodwillWhen preparing a Consolidated Statement of Income, we are told that during the year the subsidiary sold goods to the parent with a selling value of $27,000. The goods had cost the subsidiary $27,000. What adjustment is necessary?When preparing a Consolidated Statement of Income, we are told that during the year the subsidiary sold goods to the parent with a selling value of $27,000. The goods had cost the subsidiary $27,000. The adjustment necessary is to deduct $27,000 from both the combined revenue and the combined cost of sales

The parent has a 75% holding in a subsidiary. Before the year end, the subsidiary directors declared a dividend of $6,000. How much dividend should be deducted from the subsidiarys retained earnings in the calculation of consolidated retained earnings ( Working 3 )?The parent has a 75% holding in a subsidiary. Before the year end, the subsidiary directors declared a dividend of $6,000. $6,000 dividend should be deducted from the subsidiarys retained earnings in the calculation of consolidated retained earnings ( Working 3 )?

3 months into the accounting year, the parent sold an item of plant and machinery to the subsidiary and recorded a profit on sale of $40,000. At that date, the asset had a remaining estimated useful life of 4 years. Depreciation is charged on a month by month basis. What is the value of the provision for unrealised profit?The value of the provision for unrealised profit is $32,500 ($40,000 $7,500 (25% * $40,000 * 9/12))

What could be the situations where the cost of acquisition plus the value of the non-controlling interest is actually less than the fair value of the subsidiarys net assets at the date of acquisition?The situations include:* where the fair values attributed by the acquirer to the subsidiary net assets are greater than the carrying value of those assets in the subsidiarys records* where the acquirees owners were in a forced sale situation* where the acquirees owners are simply looking to sell their entity because, for example, of approaching retirementIn what situation is the Statement of Financial Position of the subsidiary time-apportioned?The Statement of Financial Position of the subsidiary is never time-apportionedWhen a subsidiary has sold goods to the parent and the parents inventory is overvalued by the unrealised profit calculated as $2,760, the adjustment for $2,760 is deducted from the Retained Earnings of which entity?When a subsidiary has sold goods to the parent and the parents inventory is overvalued by the unrealised profit calculated as $2,760, the adjustment for $2,760 is deducted from the Retained Earnings of the subsidiary?When a parent sells $130,000 goods to a subsidiary achieving margin of 30% and the subsidiary has a quarter of these goods in inventory at the year end, what value is the provision for unrealised profit?When a parent sells $130,000 goods to a subsidiary achieving margin of 30% and the subsidiary has a quarter of these goods in inventory at the year end, the provision for unrealised profit is $9,750 ( * 30% * $130,000)When a parent sells $130,000 goods to a subsidiary at a mark up of 30% and the subsidiary has none of these goods in inventory at the year end, what value is the provision for unrealised profit?When a parent sells $130,000 goods to a subsidiary at a mark up of 30% and the subsidiary has none of these goods in inventory at the year end, no provision for unrealised profit is requiredWhen attempting a consolidation exercise, what is the title of Working 2?When attempting a consolidation exercise, the title of Working 2 is GoodwillWhen attempting a consolidation exercise, what is the title of Working 1?When attempting a consolidation exercise, the title of Working 1 is Group StructureWhen the non-controlling interest is valued on a full, fair value basis, what is the basis of the allocation of any impairment in the value of the subsidiarys goodwill?When the non-controlling interest is valued on a full, fair value basis, the basis of the allocation of any impairment in the value of the subsidiarys goodwill is in proportion to the shares held by the parent compared with the shares held by the non-controlling interestThere are three ways in which the examiner can give you information to calculate the value of the non-controlling interest investment as at date of acquisition on a full, fair value basis.What are these three ways?The three ways are: telling you the value of the investment telling you the value of the goodwill attributable to the non-controlling interest telling you the value of the subsidiarys shares immediately before acquisitionWhen the non-controlling interest is valued on a proportional basis, how is the share of any impairment in the value of goodwill allocated?When the non-controlling interest is valued on a proportional basis, any impairment of goodwill is allocated entirely to the parent entityWhat are the two different ways in which the investment of the non-controlling interest may be measured?

The investment of the investment of the non-controlling interest may be measured on a proportional basis or on a full, fair value basisWhat is a non-controlling interest?A non-controlling interest is the interest of the owners of the subsidiary shares not owned by the parent entityWhen are two entities considered to be related parties?Two entities are considered to be related if:* one entity has the ability to control the other entity* one entity has the ability to exercise significant influence over the other entity* the two entities are under common controlWhat is the definition of control of an investee?Control of an investee is defined as an investor controls an investee when the investor is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investeeWhat is a rebuttable presumption?A rebuttable presumption is a presumption which is taken to be true unless it can be shown otherwiseWhen is an investee classed as an associate?An investee is classed as an associate when the investor holds a significant influence in the investeeIn what circumstances is it permitted for an entity not to prepare consolidated financial statements even though it holds greater than 50% of the voting power of another entity?* the investee company has been classified as an asset held for sale* the investor does not have control over the investee for example where the investee is in liquidation* the investor is itself a wholly owned subsidiary of another entity* the subsidiary is immaterial in the context of the total activities of the two entities* the shares of the investor are not traded on a recognised stock exchangeWhen must an entity prepare consolidated financial statements?An entity must prepare consolidated financial statements when the entity has had control over another entity at any time within the accounting period.