Which of the Following Statements Is Incorrect According to AASB

question 22

Multiple Choice

Which of the following statements is incorrect according to AASB 12?

• A) Information that enables users of consolidated financial statements to evaluate the consequences of losing control of a subsidiary must be disclosed.
• B) Where a subsidiary's financial statements are dated differently from that of its parent, the group only needs to disclose the date used by the subsidiary.
• C) An entity needs to disclose significant judgements and assumptions it has made where it controls another entity but holds less than half of voting rights of the other entity.
• D) Any risks associated with an entity's interests in other entities must be disclosed.

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Definitions:

Variable Budget

A financial plan that adjusts for changes in the volume of activity, allowing for flexible cost controls depending on actual performance.

Management by Exception

A management strategy where only significant deviations from set standards are brought to the attention of management.

Variances

The differences between planned or expected financial outcomes and the actual results achieved.

Fixed Budget

A budget that outlines expected revenues and expenses over a specific period, which does not adjust in response to changes in business activity levels.