At Balance Date, Company a Has 40% of the Voting

question 47

Multiple Choice

At balance date, Company A has 40% of the voting rights in Company B. In addition Company A holds potential voting rights in Company B amounting to 6% that are currently exercisable, and a further 9% of voting rights in Company B that can be exercised in two years' time. Which of the following statements is correct?

• A) Consolidated financial statements must be prepared for Company A and B in the current year.
• B) Consolidated financial statements need not be prepared for Company A and B for the current year.
• C) Consolidated financial statements must be prepared as Company A controls Company B at balance date.
• D) Consolidated financial statements must be prepared as Company A has more than half of the voting rights in Company B at balance date.

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Definitions:

Obsessive-Compulsive Disorder

A mental disorder characterized by unwanted recurring thoughts (obsessions) and repetitive behaviors (compulsions) that an individual feels driven to perform.

Hyperactive

Characterized by more movement and activity than is typical or desirable, often to the point of being disruptive, as in certain attention disorders.

Disruptive Mood Dysregulation Disorder

Disruptive Mood Dysregulation Disorder is a mental health condition characterized by severe and recurrent temper outbursts that are disproportionate to the situation.

Major Depressive Disorder

A mental health disorder characterized by persistent and intense feelings of sadness and despair that affect functioning.