The Partition Effect in Relation to a Group of Companies

question 30

Multiple Choice

The partition effect in relation to a group of companies arose when:

• A) It was not permitted under The Corporations Law to consolidate an entity that was not a company. This resulted not only in the non-company entity not being consolidated, but also all the entities (company or otherwise) that it controlled not being consolidated.
• B) The non-controlling shareholders in a number of companies controlled by a parent entity organised themselves to block the transfer of funds within a group.
• C) Companies in a group coordinated to transfer assets in such a way as to protect part of the group from being taxed, thus reducing the total tax owing for the group as a whole.
• D) Dividends were declared and paid in such a way as to manage cash reserves within a group.

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Definitions:

Self-discrepancy

The difference between an individual's self-concept and their ideal or ought self, which can lead to emotional distress.

Practical Application

The use of theoretical knowledge in a real-world situation to solve practical problems or achieve practical results.

Engaging

Having the quality of attracting or holding interest; captivating or involving attention.

Less Depressed

Experiencing a reduction in symptoms associated with depression, such as sadness, fatigue, or hopelessness.