E2 Groups: acquisitions, disposals and associates

Written by Saad Rahman (ACCA)

اے سی سی اے · ایکسپرٹیز لیول میں نیا · 8 سوالات

نام: ____________________   تاریخ: ____________

1. Consideration is $700, NCI at fair value is $100 and the fair value of net assets is $850. What is the result?

   • A A loss of $50
   • B Goodwill of $150
   • C A gain of $50 on a bargain purchase
   • D Goodwill of $50

2. Where is a gain on a bargain purchase recognised?

   • A In other comprehensive income
   • B In share premium
   • C In profit or loss
   • D In goodwill

3. How are acquisition-related costs, such as legal fees, treated?

   • A They are added to goodwill
   • B They are deducted from equity
   • C They are expensed
   • D They are added to the consideration

4. A subsidiary depreciates assets over 10 years but the group policy is 8 years. What is done on consolidation?

   • A The difference is goodwill
   • B Nothing
   • C The group policy is changed
   • D The subsidiary's figures are adjusted to the group policy

5. A parent sells its entire holding in a subsidiary for $1,500. The net assets are $1,100, unimpaired goodwill is $200 and the NCI is $220. What is the group gain?

   • A $400
   • B $420
   • C $640
   • D $200

6. Which method is used for an associate?

   • A Cost only
   • B Proportionate consolidation
   • C The acquisition method
   • D The equity method

7. A subsidiary sells goods to the parent at a profit and some are still held. Who bears the unrealised profit adjustment?

   • A Only goodwill
   • B Only the parent
   • C The subsidiary's profit, which affects the NCI share too
   • D No one

8. A disposal of a subsidiary that is a separate major line of business is presented as:

   • A A change in policy
   • B An adjusting event
   • C An investing activity only
   • D A discontinued operation