PSAK 110, 227, 234 Quiz

What is the correct definition of a Consolidated Financial Statement?

• A report that shows only the parent company’s financial position.

• A financial report that presents a business group’s assets, liabilities, equity, income, expenses, and cash flows as a single economic entity.

• A statement prepared for each subsidiary individually.

• A report that only includes investment entities’ assets.

What is the main purpose of a consolidated financial statement according to PSAK 110?

• To show only the financial position of the parent company

• To combine the financial results of the parent and subsidiaries as one entity

• To report transactions between unrelated companies

• To separate the results of each subsidiary

Control in PSAK 110 exists when an investor has:

• Only voting rights in a subsidiary

• Power over the investee, exposure to variable returns, and the ability to use power to affect returns

• A contract with another company

• More than 25% of ownership

What does Non-controlling Interest (NCI) represent?

• The equity in a subsidiary that belongs to other shareholders

• The total retained earnings of the parent

• The long-term debt of the subsidiary

• The dividends paid to the parent

According to PSAK 227, separate financial statements are:

• Optional and serve as supplementary information

• Mandatory for all entities

• Used to replace consolidated financial statements

• Only used for subsidiaries

In separate financial statements, investments in subsidiaries can be recorded using:

• Acquisition cost, PSAK 109 (Financial Instruments), or the equity method

• Only fair value

• Market value at reporting date

• Only historical cost

According to PSAK 234, an interim financial statement is:

• A financial report for a shorter period than a full fiscal year

• The company’s annual financial report

• A statement that includes only cash flows

• A budget plan for the next year

The main objective of PSAK 234 is to:

• Regulate tax reporting for interim periods

• Define minimum content and measurement principles for interim financial reports

• Replace annual reports with mid-year ones

• Establish rules for mergers and acquisitions

Under the Integral Theory in PSAK 234, each interim period is considered:

• A separate accounting period

• An integral part of the entire fiscal year

• A trial period before the main fiscal year

• A forecast period with no real transactions

When a parent loses control of a subsidiary, PSAK 110 requires the parent to:

• Derecognize the subsidiary’s assets, liabilities, and goodwill, and recognize any gain or loss

• Continue consolidating until liquidation

• Transfer all assets to the government

• Revalue only the subsidiary’s liabilities