Investment and Consolidation

What is an Associate?

• An entity over which the investor has no significant influence

• An entity over which the investor has control

• An entity over which the investor has significant influence

• An entity over which the investor has significant influence and control

Equity method of accounting whereby the investment is initially recognised at (a)   and adjusted thereafter for the post-acquisition change in the investor's share of the investee's net assets.

Significant influence is usually evidenced if one or more of the following is present:

• There are immaterial transactions between the investor and the investee

• has representation on the board of directors

• participates in the policy-making process

• The investor has voting rights

• There is interchange of personnel between the investor and the investee

If the share of losses is greater than or equal to the investor's interest in associate, the investment is carried at

• zero

• cost

• whichever is lower between the cost and share in losses

• the investment is depleted

A transaction or other event in which an acquirer obtains control of one or more businesses which requires that assets acquired and liabilities assume constitute a business.

• Consolidation

• Business combination

• Investment in associate

• Asset acquisition

the date on which the acquirer legally transfers the consideration, acquires the assets and assumes the liabilities of the acquiree

(a)  

Assets acquired, liabilities assumed and any noncontrolling interest is measure at (a)   during the acquisition date

A method of accounting for a business combination in which the acquirer obtains control over an entity for which it already held a non-controlling interest.

• Business combination

• Non controlling interest

• Step acquisition

• Consolidation

What is the term for the financial statements of a group presented as those of a single economic entity?

• Consolidated financial statements

• Individual financial statements

• Separate financial statements

• Combined financial statements

The equity of the whole group will appear in the consolidated financials.

• True

• False