Explain, with reasons, how the investments in a subsidiary and associate will be treated in the consolidated financial statements of a parent's group.

Q: sophisticated equity method.

A: Subsidiary Account A subsidiary account is a ledger account that is maintained within a subsidiary…

Q: Q. Which of the following is within the scope of investments accounted for using the equity method…

A: Equity Method of accounting:           Any entity can invest in another entity by acquiring less…

Q: prepares separate financial statements

A: Correct Answer is :- A at cost

Q: Q1 According to IAS 28, Investments in Associates and Joint Ventures, an investment classified as a…

A: Introduction: An investor to account for its investment in associates using the equity method as per…

Q: Determine the total amount of dividends that must be declared to meet the dividend goal of the…

A: The determination of total amount of dividends that must be declared to meet the dividend goal of…

Q: The proprietary theory, the entity theory, and the funds theory are three approaches to accounting…

A: Sole Proprietor  It is the form of business in which one person is the manager and also the owner of…

Q: 5. A gain or loss may arise from which of the following? a. The initial recognition of the debt and…

A: Liabilities are the obligation of the business towards third parties, or two internal employees, or…

Q: When preparing the consolidated financial statements, which of the following should be deducted from…

A: Consolidated financial statements are the "financial statements of a gaggle within which the assets,…

Q: Consider the following statements. I. In applying the Equity Method of accounting for investments in…

A: Equity method: This method is an accounting technique that a company uses to record the profits that…

Q: 17. Dividends are recognized in profit or loss only when: a. The amount of the divident can be…

A: Dividend means the amount given to shareholder of the company as profit distribution by company.

Q: Y Inc. is a wholly owned subsidiary of P Corporation. The following are excerpts from the 2019…

A: Intercompany sales mean that sales are made by one company of the group of companies to the other…

Q: If the entity is using the equity method to account for investment in subsidiary, the entry to…

A: Solution: Under equity method of accounting, investment is recognized at cost, then share is income…

Q: Can you give me an example of intra-equity asset transactions? How do you account for intra-equity…

A: Intra-equity asset transactions are transactions that occur between entities that are under common…

Q: Discuss how the consolidated financial statements reflect: (a) The "single economic entity" concept.…

A: Consolidated financial statements are statements that are prepared for combination of parent company…

Q: Which consolidation method should be used in preparing consolidated financial statements in…

A: To achieve the objective of having common accounting language all over the world, The International…

Q: Which of the following must be included on the face of the statement of financial position?…

A: According to IAS 1.54, following items to be shown on the face of financial position: Investment…

Q: The method of accounting for subsidiaries where investment income is limited to dividends received…

A: The simple equity method represents that the investment would be recorded at its historical cost and…

Q: Consolidated financial statements are: I. The financial statements of a group presented as those of…

A: Consolidated financial statement:- It is the financial statement in which the income & expenses,…

Q: Question: How do you account for non-controlling interests in consolidated financial statements…

A: Consolidated financial statements are prepared when a company holds a controlling interest in other…

Q: When a parent company uses the equity method to account for an investment in a subsidiary, why do…

A: Consolidated financial statements:   These financial statements are consolidated financial…

Q: How is non-controlling interest in the subsidiary’s net assets presented in the consolidated…

A: Non-Controlling Interest:- It is also known as "minority interest", these are the owner of less than…

Q: The investment in subsidiary should be recorded on the parent’s book at?

A: The financial statements are prepared at the end of an accounting year to calculate the financial…

Q: In a consolidated statement of financial position, the non-controlling interest is shown: Group of…

A: Statement of financial position is one of the financial statement of the business, which shows all…

Q: what are intra-entity transfers? How do you treat intra-entity transfers while consolidating the…

A: Intra-entity transfers are transactions involving two or more entities that are a part of the same…

Q: What method normally is used to account for the ownership of a subsidiary on the parent’s financial…

A: Under the consolidation method, the parent company acquire a company that is called subsidiary…

Q: P COMPANY acquired 2,000 voting shares of S COMPANY at P100 per share. Balance sheet of both…

A: Working note: Computation of fair value of the identifiable net assets of S company: Computation…

Consolidation

Consolidation in general examination implies an asset oscillating between well-defined methods of trading status. Consolidation is commonly known as market indecisiveness, which completes when the asset's values move forward or backward the trading structure.