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Consolidated financial statements are typically prepared when one company has a controlling financial interest in another - UNLESS?

_

a. The subsidiary is a finance company.

b. The fiscal year-ends of the two companies are morethan three months apart.

c. The investee is in bankruptcy.

d. The two companies are in unrelated industries, such asmanufacturing and real estate.

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تم إضافة السؤال من قبل mohamed Hakim CMA CPA Candidate , Accounting Manager , Andersen saudi arabia
تاريخ النشر: 2015/10/14
Sohail Lone
من قبل Sohail Lone , Assistant Manager Audit , Deloitte - United Arab Emirates

C) Correct Answer.The Investee is in Bankcruptcy

مستخدم محذوف‎
من قبل مستخدم محذوف‎

Answer C is the right option .

mohamed Hakim CMA CPA Candidate
من قبل mohamed Hakim CMA CPA Candidate , Accounting Manager , Andersen saudi arabia

dears thanks for answers  

answer is :   (c) A subsidiary should not be consolidated when

 

 

 

 

it is in bankruptcy. Consolidation of all majority-owned

 

subsidiaries is required regardless of the industry or business

 

of the subsidiary. A difference in fiscal periods of a parent

 

and a subsidiary does not of itself justify the exclusion of the

 

subsidiary from consolidation.

 

 

from Wiley CPA Study Guide

page  Question7

ASC  SFAS  , Business Combination and Consolidation 

 

 

 

 

 

 

 

 

 

 

 

 

حسين محمد ياسين
من قبل حسين محمد ياسين , Finance Manager , مؤسسة عبد الماجد محمد العمر للمقاولات العامة

agree with answer C >>>>>>>>>>>>>>>>>>>>>>>>>>>>

Vibhanshu Jindal
من قبل Vibhanshu Jindal , Accounts Executive , NAV Backoffice IT Solutions Pvt,Ltd.

Till the subsidiary company that is investee becomes bankrupt.

Ahmed kandil
من قبل Ahmed kandil , Cost Controller , Battour Holding Cpompany

answer C is the correct answer

thanks

 

Khaled Mohee Eldeen Abbas Mahmoud
من قبل Khaled Mohee Eldeen Abbas Mahmoud , Chartered Accountant # 10465 , Self-employed

d. The two companies are in unrelated industries, such as manufacturing and real estate.

Sanni Musa
من قبل Sanni Musa , Managing Director , Adima West Africa Limited

The subsidiary is a finance company.

Mohammed Thufail
من قبل Mohammed Thufail , FINANCE ASSISTANT AND LOGISTICS OPERATIONS , Gulfwest Company Limited

b. The fiscal year-ends of the two companies are morethan three months apart.

Charles Abdulkarim, CPA
من قبل Charles Abdulkarim, CPA , Managing Director, CPA,USA , York Accounting Center

Not required to consolidate  when the parent company's business operation are considerably different than that of it subsidiary. 

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