Which of the Following Statements Is in Accordance with AASB

question 13

Multiple Choice

Which of the following statements is in accordance with AASB 127 "Consolidated Financial Statements" with respect to multiple acquisitions?

• A) Each individual investment in the subsidiary is accounted for separately and separate consolidation worksheet entries are made to eliminate each investment on consolidation.
• B) Once control of the subsidiary is established, consolidation worksheet entries will eliminate the parent entity's respective share of the subsidiary's net identifiable assets as at each of the respective investment dates (at fair value).
• C) The aggregate costs of the investments would be eliminated against the parent's share of capital and reserves at the date when control is ultimately established and only one amount of goodwill (or bargain gain on purchase) is calculated.
• D) Because eliminations of each investment are made at the various investment dates, there is a need to calculate a separate amount of goodwill (bargain gain on purchase) for each investment date.
• E) All of the given answers.

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Definitions:

Pollution

The presence or introduction into the environment of substances or things that have harmful or poisonous effects.

Pigouvian Subsidy

A financial incentive given by the government to encourage activities that have positive externalities, or beneficial effects on society that are not reflected in the market price.

Free Market

An economic system where prices for goods and services are determined by the open market and consumers, with minimal government intervention.

Optimal Pigouvian Tax

A type of tax designed to correct the negative externalities of a market activity, set at a level that equates the marginal social cost of the externality with the marginal private cost.