ACCA Strategic Business Reporting

Question 1

Under IFRS 3, how should contingent consideration in a business combination be initially measured?

Accepted Answer

At fair value at the acquisition date

Answer

At the maximum possible payout amount

Answer

Only recognized when the contingency is resolved

Answer

At the nominal value of the consideration

Question 2

Which of the following best describes the 'control' criterion under IFRS 10 for consolidation purposes?

Accepted Answer

Power over the investee, exposure to variable returns, and ability to use power to affect returns

Answer

Ownership of more than 50% of voting rights

Answer

Significant influence over financial and operating policies

Answer

Legal ownership of the majority of net assets

Question 3

When a parent loses control of a subsidiary without selling all its shares, how should the retained interest be treated?

Accepted Answer

Remeasured to fair value on the date control is lost

Answer

Carried at original cost

Answer

Written down to zero

Answer

Transferred to goodwill

Question 4

Under IAS 28, an associate is defined as an entity over which the investor has:

Accepted Answer

Significant influence

Answer

Control

Answer

Joint control

Answer

Minority interest

Question 5

How are translation differences on foreign subsidiaries treated under IAS 21?

Accepted Answer

Deferred in a foreign currency translation reserve within other comprehensive income

Answer

Recognized in profit or loss immediately

Answer

Charged to goodwill

Answer

Netted against the investment in subsidiary balance

Question 6

In a group cash flow statement, how is the acquisition of a subsidiary (net of cash acquired) presented?

Accepted Answer

As an investing activity

Answer

As a financing activity

Answer

As an operating activity

Answer

As a supplemental disclosure only