For an Intragroup Transaction to Require an Adjustment to the Calculation

question 34

Multiple Choice

For an intragroup transaction to require an adjustment to the calculation of the non-controlling interest share of equity it must have which of the following characteristics:
I The transaction must result in the subsidiary recording a profit or a loss.
II After the transaction the other party (not the party holding the non-controlling interest) must have on hand an asset on which unrealised profit is accrued.
III The initial consolidation adjustment must affect both the statement of financial position and statement of comprehensive income.

• A) I and II only.
• B) I, II and III.
• C) II and III only.
• D) None of the above.

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Definitions:

Antidiuretic Hormone

A hormone released by the pituitary gland that helps regulate the balance of water in the body by reducing the amount of water excreted by the kidneys.

Kidneys

Vital organs located in the back of the abdomen that filter blood to produce urine, regulate electrolytes, maintain acid-base balance, and regulate blood pressure.

Follicle-Stimulating Hormone

A substance produced by the front part of the pituitary gland which prompts the development of ovarian follicles in women and the generation of sperm in men.

Lymphatic System

Part of the immune system, comprising a network of lymphatic vessels that carry a clear fluid called lymph towards the heart, involved in removing waste and fighting infections.