Question – 3 : In consolidated financial statements of PQR Ltd., non-controlling interest should be
presented:
A : Within long-term liabilities
B : In between long-term liabilities and current liabilities
C : Within the parent shareholders’ equity
D : Within equity but separate from the parent shareholders’ equity

Question - 4 : You are the finance manager of Vassar, a listed company which prepares consolidated
financial statements as per AS. The newly appointed managing director who is not an accountant,
reviewed the draft financial statements for the year ended 31 March 20X1 which were due to be
published shortly. The managing director had a query out of the review regarding the exclusion of certain
investment in subsidiaries from preparing consolidated financial statements.
Which of the following statements are correct about the exclusion of subsidiary from consolidation?
A : Vassar had acquired a subsidiary Aqua on 1 October 20X0. This acquisition was temporary in nature and that it had
held exclusively with a view to its subsequent disposal in near future
B : There was another subsidiary acquired in the first quarter of the year, which had huge losses. Vassar believed that
due to change in management and other synergies, it could turn around the losses into profits in few years. But, due
to the losses in the current year, you had not consolidated this subsidiary
C : If there is an investment acquired without the intention of subsequent disposal in near future, but which was
decided to dispose off subsequently, this investment can be excluded from consolidation
D : If the relevant investment was acquired with the intention of subsequent disposal in near future but
could not be disposed off due to some valid reasons, it will later be included in the consolidation

Question – 5 : A Ltd. controls another entity B Ltd., owning 60% of its ordinary share capital. At the
group’s year end, 31st December 20X1, B Ltd. included Rs. 6,000 in its receivables in respect of goods
supplied to A Ltd. However, the payables of A Ltd. included only Rs. 4,000 in respect of amounts due to
B Ltd. The difference arose because, on 31st December 20X1, A Ltd. sent a cheque of Rs. 2,000, which
was not received by B Ltd. until 3rd January 20X2. Which one of the following sets of consolidation
adjustments to current assets and current liabilities is correct?
A : Deduct Rs. 6,000 from both consolidated receivables and consolidated payables
B : Deduct Rs. 3,600 from both consolidated receivables and consolidated payables
C : Deduct Rs. 6,000 from consolidated receivables and Rs. 4,000 from consolidated payables and include Rs. 2,000 as
cash-in- transit
D : Deduct Rs. 6,000 from consolidated receivables and Rs. 4,000 from consolidated payables and include inventory in
transit of Rs. 2,000

Question – 1 : An entity has acquired a subsidiary on January 1, 2013. Goodwill of Rs. 2 million has arisen
on the purchase of this subsidiary. The subsidiary has deductible temporary differences of Rs. 1 million
and it is probable that future taxable profits are going to be available for the offset of this deductible
temporary difference. The tax rate during 2013 is 30%. The deductible temporary difference has not
been taken into account in calculating goodwill. What is the figure for goodwill that should be
recognized in the consolidated statement of financial position of the parent?
A : Rs. 2,000,000
B : Rs. 1,700,000
C : Rs. 1,400,000
D : None of the above

Question – 2 : Are the following statements true +/ false, according to Ind-AS 110 Consolidated and
separate financial statements?
I. Consolidated financial statements must be prepared using uniform accounting policies.
II. The non-controlling interest in the net assets of subsidiaries may be shown by way of note to
the consolidated statement of financial position.
Statement (1) Statement (2)
A : False & False
B : False & True
C : True & False
D : True & True

Question – 3 : Under Ind-AS 110 – Consolidated Financial Statements, when an entity loses control of
a subsidiary, it shall:-
a) Recognize the fair value of the consideration received, if any, from the transaction, event or
circumstance that resulted in the loss of control;
b) Derecognise the assets (including any goodwill) and liabilities of the subsidiary at their carrying
amounts at the date when control is lost;
c) Recognise if the transaction, event or circumstances that resulted in the loss of control involves a
distribution of shares of the subsidiary to owners in their capacity as owners, that distribution;
d) derecognize any investment retained in the former subsidiary at its fair value at the date when
control is lost
A : All a, b, c, d are true
B : Only a, b and c are true
C : Only c and d are true
D : Only b, c and d are true

Question - 4 : Can AB Ltd. account for its investments in subsidiaries at cost and investments in
associates as per Ind AS 109 in its separate financial statements?
A : Yes, but only for investments in subsidiaries
B : No, as it violates Ind AS 27
C : Yes, for both subsidiaries and associates
D : No, unless approved by a financial regulator

Question - 5 : What does Ind AS 27 permit regarding the accounting of investments in separate financial
statements?
A : Only at cost for all categories of investments
B : At cost or in accordance with Ind AS 109, depending on the investment category
C : Only in accordance with Ind AS 109 for all investments
D : At fair value for all investments

Question - 6 : If a parent company, Parent Co, acquires a subsidiary, Sub Co, for $500,000, where Sub
Co's fair value of identifiable net assets is $450,000, and Sub Co has a recognized contingent liability of
$30,000, how should this contingent liability be treated in the consolidated financial statements?
A : Recognize the contingent liability at $30,000 in Parent Co's consolidated financial statements.
B : Do not recognize the contingent liability as it is not probable.
C : Recognize the contingent liability at its fair value.
D : Adjust the goodwill by the amount of the contingent liability.

Question - 7 : How is the determination of goodwill affected under IND AS 110 when an entity acquires
100% interest in another entity without any non-controlling interest?

A : Goodwill is determined by subtracting net assets from the total consideration
B : Goodwill calculation is not applicable in 100% acquisitions
C : Non-controlling interest is assumed at fair value for goodwill calculation
D : Goodwill is determined by the fair value of the acquired entity’s net assets alone