ADVANCED FINANCIAL ACCOUNTING-ACCESS
12th Edition
ISBN: 9781260518740
Author: Christensen
Publisher: MCG
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Question
Chapter 3, Problem 3.2.4E
To determine
Concept Introduction:
The variable interest entity is the one in which the holding of controlling interest by the investor does not depend on majority of voting rights but on the concept of special purpose entity.
To choose: The correct option.
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5. Who is required to consolidate a variable interest entity
6. What are the criteria to determine if a primary beneficiary exists
Explain what a variable interest entity is, what a major beneficiary is, and what elements are utilized to determine whether or not a variable interest entity is liable to consolidation.
19.
When the entity uses the IFRS for SMEs, investments in jointly controlled entities must be tested for impairment, if the entity uses
Group of answer choices
The cost model or the fair value model
The equity method or the fair value model
The equity method or the cost model
The cost method, the equity method or the fair value model
Chapter 3 Solutions
ADVANCED FINANCIAL ACCOUNTING-ACCESS
Ch. 3 - What is the basic idea underlying the preparation...Ch. 3 - How might consolidated statements help an investor...Ch. 3 - Prob. 3.3QCh. 3 - Prob. 3.4QCh. 3 - Prob. 3.5QCh. 3 - Prob. 3.6QCh. 3 - Prob. 3.7QCh. 3 - Prob. 3.8QCh. 3 - Prob. 3.9QCh. 3 - Prob. 3.10Q
Ch. 3 - Prob. 3.11QCh. 3 - Prob. 3.12QCh. 3 - What is meant by indirect control? Give an...Ch. 3 - Prob. 3.14QCh. 3 - Prob. 3.15QCh. 3 - Prob. 3.16QCh. 3 - Prob. 3.17QCh. 3 - Prob. 3.18QCh. 3 - Prob. 3.1CCh. 3 - Prob. 3.2CCh. 3 - Prob. 3.1.1ECh. 3 - Prob. 3.1.2ECh. 3 - Prob. 3.1.3ECh. 3 - Prob. 3.1.4ECh. 3 - Multiple-Choice Question on Variable Interest...Ch. 3 - Multiple-Choice Question on Variable Interest...Ch. 3 - Prob. 3.2.3ECh. 3 - Prob. 3.2.4ECh. 3 - Prob. 3.3.1ECh. 3 - Prob. 3.3.2ECh. 3 - Prob. 3.3.3ECh. 3 - Prob. 3.4.1ECh. 3 - Prob. 3.4.2ECh. 3 - Prob. 3.4.3ECh. 3 - Prob. 3.4.4ECh. 3 - Balance Sheet Consolidation On January 1, 20X3,...Ch. 3 - Prob. 3.6ECh. 3 - Prob. 3.7ECh. 3 - Prob. 3.8ECh. 3 - Prob. 3.9ECh. 3 - Reporting for a Variable Interest Entity Gamble...Ch. 3 - Prob. 3.11ECh. 3 - Prob. 3.12ECh. 3 - Prob. 3.13ECh. 3 - Prob. 3.14ECh. 3 - Prob. 3.15ECh. 3 - Prob. 3.16ECh. 3 - Prob. 3.17ECh. 3 - Prob. 3.18ECh. 3 - Prob. 3.19.1PCh. 3 - Prob. 3.19.2PCh. 3 - Prob. 3.20PCh. 3 - Prob. 3.21PCh. 3 - Prob. 3.22PCh. 3 - Prob. 3.23PCh. 3 - Prob. 3.24PCh. 3 - Prob. 3.25PCh. 3 - Prob. 3.26PCh. 3 - Prob. 3.27PCh. 3 - Prob. 3.28PCh. 3 - Prob. 3.29PCh. 3 - Consolidated Worksheet at End of the First Year of...Ch. 3 - Prob. 3.31P
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Similar questions
- 60 When the entity uses the IFRS for SMEs, investments in jointly controlled entities must be tested for impairment, if the entity uses Group of answer choices The cost method, the equity method or the fair value model The cost model or the fair value model The equity method or the cost model The equity method or the fair value modelarrow_forward1. PAS 28 defines an ‘associate’ as Choices An entity that controls one or more entities. An entity over which the investor has significant influence. A joint arrangement whereby the parties that have joint control of the arrangement have rights to the net assets of the arrangement. An entity that is controlled by another entity. 2. In accordance with PAS 1, which of the following gains or losses from reclassification of financial assets need not be presented separately in the profit or loss section or the statement of profit or loss? Choices None of these. Reclassification of financial assets out of the FVTOCI measurement category to FVTPL. Reclassification of financial assets out of the amortized cost measurement category to FVTPL. Reclassification of financial assets out of the FVTPL measurement category.arrow_forwardIn a business combination, an acquirer's interest in the fair value of the net assets acquired exceeds the consideration transferred in the combination. Under PFRS 3 Business Combinations, the acquirer should A. recognize the excess immediately in profit or los B. recognize the excess immediately in other comprehensive income C. reassess the recognition and measurement of the net assets acquired and the consideration transferred, then recognize any excess immediately in other comprehensive income D. reassess the recognition and measurement of the net assets acquired and the consideration transferred, then recognize any excess immediately in profit or lossarrow_forward
- which of the following entities would relative valuation be appropriate? a.) a cooperative b.) a publicly listed corporation c.) a government agency d.) a sari-sar storearrow_forwardChoose the letter of the item NOT belonging or related to the group in computing for Non-Controlling Interest in the Consolidated Statement of Financial Position. * a. Answer not given b. full goodwill. c. amortization of excess. d. upstream transactions. e. gain on bargain purchase.arrow_forwardDiscuss how the consolidated financial statements reflect: (a) The "single economic entity" concept. (b) The distinction between "control" and "ownership".arrow_forward
- Which statement is correct regarding derecognition of financial assets? A. Transfer of risks and rewards is evaluated by determining the transferee’s ability to sell the asset. B. A sale and repurchase transaction where the repurchase price is a fixed price is a transfer of financial asset that qualifies for derecognition. C. The entity shall continue to recognize the transferred asset in its entirety if the transfer does not qualify for derecognition because the entity has retained substantially all the risks and rewards of ownership of the transferred asset. D. If an entity neither transfers nor retains substantially all the risks and rewards of ownership of a transferred asset, the entity shall continue to recognize the transferred asset to the extent of its continuing involvement.arrow_forwardIn a business combination, an acquirer's interest in the fair value of the net assets acquired exceeds the consideration transferred in the combination. Under IFRS 3 Business Combinations, the acquirer should a. reassess the recognition and measurement of the net assets acquired and the consideration transferred, then recognize any excess immediately in profit or loss b. recognize the excess immediately in other comprehensive income c. reassess the recognition and measurement of the net assets acquired and the consideration transferred, then recognize any excess immediately in other comprehensive income d. recognize the excess immediately in profit or lossarrow_forwardWhat drives the determination of the boundary of a reporting entity that is not a legal entity and does not comprise only legal entities all linked by a parent-subsidiary relationship? O A. Management's choice B. Legal form of the reporting entity C. Information needs of the primary users of the reporting entity D AILof the abovearrow_forward
- In a business combination, an acquirer's interest in the fair value of the net assetsacquired exceeds the consideration transferred in the combination. Under PFRS3 Business Combinations, the acquirer should A. reassess the recognition and measurement of the net assets acquired and theconsideration transferred, then recognize any excess immediately in othercomprehensive income B. recognize the excess immediately in other comprehensive income C. recognize the excess immediately in profit or loss D. reassess the recognition and measurement of the net assets acquired and theconsideration transferred, then recognize any excess immediately in profit or lossarrow_forwardWhich of the following statements is true when assessing whether potential voting rights contribute to control? Even when potential voting rights are not exercisable or convertible until a future date or until the occurrence of a future event, they are still considered in making that assessment. The proportions of profit or loss and changes in equity allocated to the parent and non-controlling interests are determined on the basis of present ownership, and should reflect any exercise or conversion of potential voting rights. Where potential voting rights are currently exercisable or convertible, they are considered when assessing whether an entity has the power to govern another entity's financial and operating policies. In assessing whether potential voting rights contribute to control, all of the facts and circumstances that affect those rights should be considered including the intention of management and the financial ability to exercise or convert such rights.arrow_forwardWhich of the following statements is incorrect? А. For each business combination, one of the combining entities shall be identified as the acquirer. The acquirer shall measure the identifiable assets acquired and the liabilities assumed at their acquisition-date agreed values. An entity shall account for each business combination by applying the acquisition method. C. D. The acquirer is required to recognise, separately from goodwill, the identifiable assets acquired, the liabilities assumed and any non- controlling interest in the acquiree. B.arrow_forward
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