What is joint control?

the right to jointly govern the financial and operating policies of an economic activity on the basis of contractual agreement

an arrangement of which two or more parties share economic benefits

Non-controlling interest?

Is a proportion of the net performance and net assets of a subsidiary corresponding to the interests not owned directly or indirectly by the parent company through its subsidiaries

Includes direct and indirect interest obtained through parent company

When is NCI appeared in Consolidated FS?

When subsidiary is not wholly-owned by the group

When subsidiary is not wholly-owned by the parent

When subsidiary is wholly-owned by the group

How can NCI be presented?

In the Consolidated Balance Sheet - under heading "Non-controlling interest" - Liabilities section

In the Consolidated Income statement - under heading "NCI's profit interest" - Liabilities Section

In the Consolidated Balance Sheet- under heading "Non-controlling interest" - Owner's Equity Section

In the Consolidated Balance Sheet - under heading "NCI's profit after tax

In the Consolidated Income Statement - under heading "Non-controlling interest"

the future economic benefits arising from other assets acquired that are not individually identified and separately recognised.

the difference between the cost of combination and the acquirer's ownership in acquisition-date fair value of identifiable net assets acquired and recognised contingent liabilities.

the future economic benefits arising from other assets acquired that are individually identified and separately recognised.

Negative goodwill? (Gain from a bargain purchase)

Arising when the cost of combination is less than the acquirer's ownership in acquisition-date fair value of identifiable net assets acquired and contingent liabilities recognised.

Arising when the cost of combination is higher than the acquirer's ownership in acquisition-date fair value of identifiable net assets acquired and contingent liabilities recognised.

How to present goodwill?

As an asset in the Consolidated Balance Sheet - under heading "Goodwill"

As an asset in the Private Balance Sheet of parent company - under heading "Goodwill"

Costs directly attributable to the business combination?

Consulting, auditing and valuation fees

Cost of issuing debt instruments in exchange for control over the acquiree

Cost of issuing equity instruments in exchange for control over the acquiree

If the parent acquires the subsidiary's shares by exchanging fixed assets,

the cost of combination is determined based on the fair value of the fixed assets at DOA.

the cost of combination is determined based on the carrying amount of the fixed assets.

the cost of combination is determined based on the initial costs of the fixed assets.

If the parent acquires the subsidiary's shares by exchanging inventories,

the cost of combination is determined based on the FV of the exchanged inventories at DOA.

the cost of combination is determined based on the cost of the exchanged inventories.

If the business combination transaction does not result in a parent company-subsidiary relationship, the assets and liabilities of the acquiree are presented

on the acquirer's financial statements at fair value

on the acquirer's financial statements at book value

If the business combination transaction result in a parent company-subsidiary relationship, the assets and liabilities of the acquiree are presented

on the acquirer's financial statements at book value

on the group's FS at fair value

on the acquirer's financial statements at fair value

on the group's FS at book value

If the group is not required to prepare consolidated FS at the date of acquisition,

the parent is still required to determine goodwill and non-controlling interests @ DOA

the parent does not need to determine goodwill and non-controlling interests @ DOA

If the group is not required to prepare consolidated FS at the date of acquisition,

the parent is still required to determine the fair value of the subsidiary's identifiable assets and liabilities at the date of acquisition.

the parent does not need to determine the fair value of the subsidiary's identifiable assets and liabilities at the date of acquisition.

If the group is not required to prepare consolidated FS at the date of acquisition,

the parent is still required to determine the cost of combination at the date of acquisition.

the parent does not need to determine the cost of combination at the date of acquisition.

Consolidated financial statements included: Annual, Interim, Semi-annual,

Consolidated financial statements included: Quaterly

Interim consolidated financial statements

Semi-annual consolidated financial statements

Quarterly consolidated financial statements

Annual consolidated financial statements must be prepared in full format

must be prepared in full format

could be prepared in summary format

Interim consolidated financial statements

could be prepared either in full or summary format

must be prepared in full format

must be prepared in summary format

In Vietnam, a set of consolidated FS includes:

A consolidated income statement

A statement of changes in equity

A downstream transaction?

An intercompany transaction that is a sale or contribution of assets from the investor to its associate or joint venture.

An intercompany transaction that is a sale or contribution of assets from the parent to its subsidiary.

An intercompany transaction that is a sale or contribution of assets from the associate or joint venture to its investor.

An intercompany transaction that is a sale or contribution of assets from the subsidiary to its parent.

An upstream transaction?

An intercompany transaction that is a sale or contribution of assets from the parent to its subsidiary.

An intercompany transaction that is a sale or contribution of assets from the investor to its associate or joint venture.

An intercompany transaction that is a sale or contribution of assets from the associate or joint venture to its investor.

An intercompany transaction that is a sale or contribution of assets from the subsidiary to its parent.

COST ACCOUNTING METHOD

a method of accounting whereby the investment is initially recognised at cost and no adjustment needed for the post-acquisition change in the investor's share of the investee's net assets

a method of accounting whereby the investment is initially recognised at cost and adjusted thereafter for the post-acquisition change in the investor's share of the investee's net assets.

COST ACCOUNTING METHOD

The investor's income statement recognises its share of the investee's post-acquisition accumulated profit.

The investor's income statement recognises its share of the investee's profit or loss.

COST ACCOUNTING METHOD

The investor uses cost accounting method for its investment in an associate in its private FS.

The investor uses cost accounting method for its investment in an associate in its consolidated FS.

COST ACCOUNTING METHOD

The investor uses cost accounting method for its investment in a joint venture in its private FS.

The investor uses cost accounting method for its investment in a joint venture in its consolidated FS.

EQUITY ACCOUNTING METHOD

a method of accounting whereby the investment is initially recognised at cost and no adjustment needed for the post-acquisition change in the investor's share of the investee's net assets.

a method of accounting whereby the investment is initially recognised at cost and adjusted thereafter for the post-acquisition change in the investor's share of the investee's net assets.

EQUITY ACCOUNTING METHOD

The investor's income statement recognises its share of the investee's post-acquisition accumulated profit.

The investor's income statement recognises its share of the investee's profit or loss.

EQUITY ACCOUNTING METHOD

The investor uses equity accounting method for its investment in an associate in its private FS.

The investor uses equity accounting method for its investment in an associate in its consolidated FS.

EQUITY ACCOUNTING METHOD

The investor uses equity accounting method for its investment in a joint venture in its private FS.

The investor uses equity accounting method for its investment in a joint venture in its consolidated FS.

Which type(s) of business is/are required to prepare segment reports?

Entities whose debt or equity securities are publicly traded

Entities who are in the process of issuing securities in securities markets

Parent A and Subsidiary B are listed companies. On which type of FS is A required to prepare segment reports?

Consolidated financial statements

A's private financial statements

Which are not related parties?

Members of key management personnel

Understanding Parent-Subsidiary Relationships

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44 questions

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MULTIPLE CHOICE QUESTION

30 sec • 1 pt

What is a group?

A parent and a subsidiary

A parent and its subsidiaries

A parent and its subsidiaries and associates

A parent and all its subsidiaries, associates and joint ventures

A parent and its subsidiaries, all of which are state-owned

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

What is a parent?

An entity that controls one or more entities

An entity that has subsidiaries and associates

An entity that has one subsidiary and some associates

An entity that has subsidiaries, associates and joint ventures

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

What is a subsidiary?

An entity that is controlled by one or more entities

An entity that controls other entities

An entity that is controlled by another entity

An entity that must have the right to control other entities

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

What is control?

the power to participate in the financial and operating policy decisions of the investee to obtain benefits from its activities

the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities

Control does not necessarily mean governing the financial and operating policies of an entity to obtain benefits from its activities

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

What is significant influence?

the power to participate in the financial and operating policy decisions of the investee and control those policies

the power to participate in the financial and operating policy decisions of the investee but is not control or joint control of those policies

the power to participate in the financial and operating policy decisions of the investee but may or may not control those policies.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

What is an associate?

an entity over which the investor has significant influence

an entity over which the investor has the right to control

an entity over which investors joint control

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

What is a venture?

arhat is a joint in the investor has significant influence but is not a subsidiary or an associate of the investor

an entity in which the investor has no significant influence and is a subsidiary or associate company of the investor

contractual agreement between two or more parties to jointly carry out an economic activity, which is jointly controlled by the investors to the joint venture.

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