AASB 127 Notes That in Preparing Consolidated Financial Statements,an Entity

question 21

True/False

AASB 127 notes that in preparing consolidated financial statements,an entity combines the financial statements of the parent and the subsidiaries line by line by adding together,in proportion to the degree of ownership,like items of assets,liabilities,income and expenses; but not equity balances:

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Definitions:

Working Capital

A measure of a firm's ability to fulfill short-term financial obligations, underscored by its liquid assets minus its due debts.

Salvage Value

The appraised remaining value of an asset at the point of its life end.

Pretax Return

The earnings of a company before taxes have been deducted.

Working Capital

The gap between what a business owns in current assets and owes in current liabilities, showing the available liquidity to cover daily operational costs.