SBR Groups and foreign currency

Under IFRS 10 an investor controls an investee when it has:

• 1 Power, exposure to variable returns and the ability to use power to affect returns
• 2 More than 50 percent of the shares in all cases
• 3 Board representation only
• 4 An investment above 20 percent

A parent pays $800,000 for 80 percent of a subsidiary. NCI is measured at fair value of $150,000. The fair value of net assets is $700,000. Goodwill is:

• 1 $250,000
• 2 $150,000
• 3 $240,000
• 4 $100,000

A parent pays $800,000 for 80 percent of a subsidiary. The fair value of net assets is $700,000. NCI is measured at its proportionate share of net assets. Goodwill is:

• 1 $260,000
• 2 $100,000
• 3 $250,000
• 4 $240,000

A parent holds 30 percent of an associate that earned a profit of $200,000. Under the equity method the group share of profit is:

• 1 $30,000
• 2 $200,000
• 3 $60,000
• 4 $140,000

A subsidiary sold goods to the parent for $100,000 at a margin of 25 percent on selling price. Goods with a transfer price of $40,000 are in the parent's inventory at the year end. The unrealised profit to eliminate is:

• 1 $10,000
• 2 $40,000
• 3 $4,000
• 4 $25,000

A joint arrangement in which the parties have rights to the assets and obligations for the liabilities is a:

• 1 Joint venture
• 2 Subsidiary
• 3 Joint operation
• 4 Associate

When a parent loses control of a subsidiary but keeps an interest, the retained interest is:

• 1 Ignored
• 2 Left at cost
• 3 Remeasured to fair value at the date control is lost
• 4 Treated as goodwill

When a foreign operation is translated, income and expenses are translated at:

• 1 The opening rate
• 2 The closing rate
• 3 The rate at the date of the transactions, or an average rate as an approximation
• 4 The rate on the date of acquisition