Accounts of Groups Very Short Answer Type Questions

Accounts of Groups Very Short Answer Type Questions

Question 1.
What is group?
Answer:
Group is summary of accounts based on criteria that effects when master recorder are created.

Question 2.
What is business combination as per AS-103.
Answer:
A business combination is a transaction or event in which acquires obtains control over a business. For ex: Acquisition of a shares or net assets, legal mergers etc.

Question 3.
What are Consolidated Financial Statements as per IFRS 10?
Answer:
Consolidated Financial Statements outlines the requirements for the preparation and presentation of consolidated financial statements, requiring entities to consolidate entities it controls. Control requires exposure or rights to variable returns and the ability to affect those returns through power over an investee.

Question 4.
State the objectives of IFRS 10.
Answer:
The objective of IFRS 10 is to establish principles for the presentation and preparation of consolidated financial statements when an entity controls one or more other entities.

Question 5.
What is Control?
Answer:
An investor controls and investee when the investor is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect those returns through power over the investee.

Question 6.
Give the meaning of Power.
Answer:
Existing rights that give the current ability to direct the relevant activities of the investee.

Question 7.
What do you mean by Subsidiary?
Answer:
An entity that is controlled by another entity.

Question 8.
What is Parent?
Answer:
An entity that controls one of more subsidiaries.

Question 9.
What is Associate?
Answer:
An entity over which an investor has significant influence and which is neither a subsidiary nor and interest in a joint venture.

Question 10.
How do you treat pre-acquisition profit or loss?
Answer:
Pre-acquisition reserves are retained profits and other reserves that exist in a subsidiary’s statement of financial position at the date of acquisition. Pre-acquisition reserves are capitalised at the date of acquisition by including in the goodwill calculation.

Question 11.
What do you mean by unrealised profits?
Answer:
An “unrealized profit” occurs when an asset is purchased and then rises in value, but hasn’t been sold.

Question 12.
What are accounting policies?
Answer:
Accounting policies are the specific principles bases, connections rules, practices applied by an entity in preparing and presenting financial statements.