When Preparing Consolidated Financial Statements, AASB 127 Consolidated and Separate

question 28

Multiple Choice

When preparing consolidated financial statements, AASB 127 Consolidated and Separate Financial Statements is most closely based on the:

• A)Parent entity concept
• B)Proprietary concept
• C)Legal group concept
• D)Entity concept

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Definitions:

Surplus

The amount by which revenues, resources, or supplies exceed what is needed or used; in finance, it refers to profit or the amount by which income exceeds expenditures.

Revised Article 9

An update to the Uniform Commercial Code that deals with secured transactions; it governs the process of securing assets to back a loan.

UCC

The Uniform Commercial Code is a widespread legislative schema that guides all commercial operations in the United States.

Security Agreement

is a legal document that provides a lender a security interest in a specified asset or property that serves as collateral for a loan.