At Balance Date, Company a Has 40% of the Voting

question 47

Multiple Choice

At balance date, Company A has 40% of the voting rights in Company B. In addition Company A holds potential voting rights in Company B amounting to 6% that are currently exercisable, and a further 9% of voting rights in Company B that can be exercised in two years' time. Which of the following statements is correct?

• A) Consolidated financial statements must be prepared for Company A and B in the current year.
• B) Consolidated financial statements need not be prepared for Company A and B for the current year.
• C) Consolidated financial statements must be prepared as Company A controls Company B at balance date.
• D) Consolidated financial statements must be prepared as Company A has more than half of the voting rights in Company B at balance date.

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Definitions:

Experimenter Bias

A form of bias introduced by the expectancies or preferences of the researcher that can affect the outcome of an experiment.

Expected Outcome

The anticipated result or effect of an action, process, or experiment.

Experiment

An experiment conducted for the purpose of discovering something new, verifying a hypothesis, or proving an established fact.

Ganzfeld Procedure

An experimental technique used in parapsychology to test individuals for extrasensory perception, involving sensory deprivation.