CONCEPTUAL FRAMEWORK

INTERNATIONAL FINANCIAL REPORTING STANDARDS

1.Which ONE of the following is NOT a function of the IASB?

A Responsibility for all IFRS technical matters B Publication of IFRSs

C Overall supervisory body of the IFRS organisations

D Final approval of interpretations by the IFRS Interpretations Committee

2 Which ONE of the following is NOT part of the process of developing a new International
Financial Reporting Standard?

A Issuing a discussion paper that sets out the possible options for a new standard

B Publishing clarification of an IFRS where conflicting interpretations have developed

C Drafting an IFRS for public comment

D Analysing the feedback received on a discussion paper

3 Whose needs are general purpose financial statements intended to meet?

A Management of an entity B IASB

C Primary users of financial statements D Local stock exchange

4 Which body develops International Financial Reporting Standards?

A IASB B IFRS Foundation C IFRS IC D IFRS Advisory Council

5. According to the International Accounting Standards Board, in whose interests are financial
reporting standards issued?

A Company directors B The public C Company auditors D The government

6. The issue of a new IFRS means that:

(1) An existing standard may be partially or completely withdrawn

(2) Issues that are not covered by an existing standard are introduced

(3) Issues raised by users of existing standards are explained and clarified

(4) Current financial reporting practice is modified

Which combination of the above will most likely be the result of issuing a new IFRS?

A 1, 2 and 3 B 2, 3 and 4 C 1, 3 and 4 D 1, 2 and 4

7 IFRS requirements would be most relevant to the financial statements of which of the following
entities?

A An association established by royal charter B A charitable trust

C A community benefit society D A limited liability partnership

CONCEPTUAL FRAMEWORK

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8. Which ONE of the following is stated as an underlying assumption according to the IASB’s
Conceptual Framework for Financial Reporting?

A Neutrality B Accruals C Relevance D Going concern

9. The IASB uses the Conceptual Framework for Financial Reporting (Framework) to assist in
developing new standards.

Which one of the following is NOT covered by the Framework?

A The format of financial statements B The objective of financial statements

C Concepts of capital maintenance D The elements of financial statements

10. An item meets the definition of an element in accordance with the Conceptual Framework for
Financial Reporting.

Which of the following criteria must be met for an item to be recognised in the financial statements?

(1) It is probable that any future economic benefit associated with the item will flow to or from the
entity

(2) The item has a cost or value that can be measured with reliability

(3) The rights or obligations associated with the item are controlled by the entity

A 1 only B 2 only C 1 and 2 only D 1, 2 and 3

11. Which of the following statements regarding financial information are correct?

(1) Faithful representation means that the legal form of a transaction must be reflected in financial
statements, regardless of the economic substance

(2) Under the recognition concept only items capable of being measured in monetary terms can be
recognised in financial statements

(3) It may sometimes be necessary to exclude information that is relevant and reliable from financial
statements because it is too difficult for some users to understand

A 1 only B 2 only C 1 and 2 only D 1, 2 and 3

12. Which of the following statements are correct?

(1) The money measurement concept requires all assets and liabilities to be accounted for at original
(historical) cost

(2) Faithful representation means that the economic substance of a transaction should be reflected
in the financial statements, not necessarily its legal form

(3) The realisation concept means that profits or gains cannot normally be recognised in the
statement of profit or loss until cash has been received

A 1 and 2 only B 1 and 3 only C 2 and 3 only D 1, 2 and 3

13. IFRS 13 Fair Value Measurement sets out a fair value hierarchy that categorises inputs into three
levels.

Which of the following inputs would have the highest authority?

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A Unobservable inputs B Directly observable inputs other than quoted prices

C Quoted prices in active markets at the measurement date D Market-corroborated inputs

14. The IASB’s Conceptual Framework for Financial Reporting identifies qualitative characteristics of
financial statements.

Which TWO of the following characteristics are fundamental qualitative characteristics according
to the IASB’s Framework?

(1) Relevance (2) Understandability (3) Faithful representation (4) Comparability

A 1 and 2 B 1 and 3 C 2 and 4 D 3 and 4

15. Which of the following is the underlying assumption in the International Accounting Standards
Board’s Conceptual Framework for Financial Reporting?

A Accruals B Reliability C Going concern D Relevance

16.On 31 December 20X3 Tenby sold $100,000 trade receivables to a debt factor, for $90,000. If the
factor has not collected the debt by 28 February 20X4 it can be returned to Tenby.

What is the current asset for the trade receivables in Tenby’s statement of financial position as at
31 December 20X3?

A $nil B $10,000 C $90,000 D $100,000

17. Although most items in financial statements are shown at their historical cost, increasingly the
IASB is requiring or allowing current cost to be used in many areas of financial reporting.

Drexler acquired an item of plant on 1 October 20X2 at a cost of $500,000. It has an expected life of
five years (straight-line depreciation) and an estimated residual value of 10% of its historical cost or
current cost as appropriate. As at 30 September 20X4, the manufacturer of the plant still makes the
same item of plant and its current price is $600,000.

What is the correct carrying amount to be shown in the statement of financial position of Drexler
as at 30 September 20X4 under historical cost and current cost?

Historical cost($) Current cost($)

A 320,000 600,000

B 320,000 384,000

C 300,000 600,000

D 300,000 384,000

18. Recognition is the process of including within the financial statements items which meet the
definition of an element in the IASB’s Conceptual Framework for Financial Reporting.

Which of the following items should be recognised as an asset in the statement of financial position
of a company?

A A skilled and efficient workforce which has been very expensive to train. Some of these staff are
still in the employment of the company

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B A highly lucrative contract signed during the year which is due to commence shortly after the year
end

C A government grant relating to the purchase of an item of plant several years ago which has a
remaining life of four years

D A receivable from a customer which has been sold (factored) to a finance company. The finance
company has full recourse to the company for any losses

19.Comparability is identified as an enhancing qualitative characteristic in the IASB’s Conceptual

framework for financial reporting.

Which of the following does NOT improve comparability?

A Restating the financial statements of previous years when there has been a change of accounting
policy

B Prohibiting changes of accounting policy unless required by an IFRS or to give more relevant and
reliable information

C Disclosing discontinued operations in financial statements

D Applying an entity’s current accounting policy to a transaction which an entity has not engaged in
before

WARDLE
The following scenario relates to questions 20-24.
Wardle’s activities include the production of maturing products which take a long time before they
are ready to retail. Details of one such product are that on 1 April 20X5 it had a cost of $5 million and
a fair value of $7 million. The product would not be ready for retail sale until 31 March 20X8.

On 1 April 20X5 Wardle entered into an agreement to sell this product to Easyfinance for $6 million.

The agreement gave Wardle the right to repurchase the product at any time up to 31 March 20X8 at
a fixed price of $7,986,000, at which date Wardle expected the product to retail for $10 million. The
compound interest Wardle would have to pay on a three-year loan of $6 million would be:

$000

Year 1 600

Year 2 660

Year 3 726

This interest is equivalent to the return required by Easyfinance.

20.Based on the substance of the transaction what will be the outstanding liability at the end of
year 2?

A Nil B $6,600,000 C $7,260,000 D $7,986,000

21. If Wardle accounted for the legal form of the transaction what would be the finance costs
charged to profit or loss in year 3?

A Nil B $1,986,000 C $726,000 D $7,986,000

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22. What will be the effect on Wardle’s return on capital employed (ROCE) and gearing if the
transaction is accounted for based on its substance rather than its legal form?

ROCE Gearing

A Higher Higher

B Higher Lower

C Lower Lower

D Lower Higher

23. Which of the following are examples of transactions which could be used to create “offbalance
sheet finance”?

(1) Sale and repurchase arrangements (2) Factoring of debts

(3) Warranty provisions (4) Consignment inventories

A 1, 2 and 3 B 2, 3 and 4 C 1, 3 and 4 D 1, 2 and 4

24.Wardle has received a request from a customer to buy 1,000 units of MGA; the customer has
asked Wardle to hold the product and also to be billed for the sale.

Which of the following criteria must be met before Wardle can recognise revenue in respect of this
bill-and-hold transaction?

(1) Wardle plans to manufacture the product two weeks before delivery is due to the customer

(2) The customer has requested that the goods be held until they are ready to take delivery

A 1 only B 2 only C Both 1 and 2 D Neither 1 or 2

SET-2

1 How does the Conceptual Framework define an asset?

A A resource owned by an entity as a result of past events and from which future economic benefits
are expected to flow to the entity

B A resource over which an entity has legal rights as a result of past events and from which economic
benefits are expected to flow to the entity

C A resource controlled by an entity as a result of past events and from which future economic
benefits are expected to flow to the entity

D A resource to which an entity has a future commitment as a result of past events and from which
future economic benefits are expected to flow from the entity

2 Which one of the following would be classified as a liability?

A Dexter's business manufactures a product under licence. In 12 months' time the licence expires
and Dexter will have to pay $50,000 for it to be renewed.

B Reckless purchased an investment 9 months ago for $120,000. The market for these investments
has now fallen and Reckless's investment is valued at $90,000.

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C Carter has estimated the tax charge on its profits for the year just ended as $165,000.

D Expansion is planning to invest in new machinery and has been quoted a price of $570,000.

3 Which one of the following would correctly describe the net realisable value of a two year old
asset?

A The original cost of the asset less two years' depreciation

B The amount that could be obtained from selling the asset, less any costs of disposal

C The cost of an equivalent new asset less two years' depreciation

D The present value of the future cash flows obtainable from continuing to use the asset (2 marks)

4 The Conceptual Framework identifies an underlying assumption in preparing financial

statements. This is:

A Going concern B Materiality C Substance over form D Accruals

5 The Conceptual Framework identifies four enhancing qualitative characteristics of financial

information. For which of these characteristics is disclosure of accounting policies particularly
important?

A Verifiability B Timeliness C Comparability D Understandability

6 Which of the following is NOT a purpose of the IASB's Conceptual Framework?

A To assist the IASB in the preparation and review of IFRS

B To assist auditors in forming an opinion on whether financial statements comply with IFRS

C To assist in determining the treatment of items not covered by an existing IFRS

D To be authoritative where a specific IFRS conflicts with the Conceptual Framework

7 Recognition is the process of including within the financial statements items which meet the
definition of an element according to the IASB's Conceptual Framework for Financial Reporting.
Which of the following items should be recognised as an asset in the statement of financial
position of a company?

A A skilled and efficient workforce which has been very expensive to train. Some of these staff are
still in the employment of the company.

B A highly lucrative contract signed during the year which is due to commence shortly after the year
end

C A government grant relating to the purchase of an item of plant several years ago, which has a
remaining life of four years

D A receivable from a customer which has been sold (factored) to a finance company. The finance
company has full recourse to the company for any losses.

8 Comparability is identified as an enhancing qualitative characteristic in the IASB's Conceptual

Framework for Financial Reporting. Which of the following does NOT improve comparability?

A Restating the financial statements of previous years when there has been a change of accounting
policy

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B Prohibiting changes of accounting policy unless required by an IFRS or to give more relevant and
reliable information

C Disclosing discontinued operations in financial statements

D Applying an entity's current accounting policy to a transaction which an entity has not engaged in
before

Information relevant to Questions 9–13.

The accountant of Lisbon is considering a number of transactions and events and how they should
be treated in accordance with the concepts and qualitative characteristics of financial information as
set out in the Conceptual Framework. During the year ended 31 March 20X6, Lisbon experienced the
following transactions or events.

(i) Sold an asset to a finance company and leased it back for the remainder of its useful life. The
accountant has decided that this should be treated as a secured loan.

(ii) The company's statement of profit or loss prepared using historical costs showed a loss from
operating its shops, but the company is aware that the increase in the value of its properties during
the period far outweighed the operating loss.

(iii) Inventory has up to this year been valued using FIFO but the accountant is considering changing
to the weighted average method for the year to 31 March 20X6.

9 The accountant is aware that some members of the Board of Lisbon have little understanding of
accounting and he is worried about his presentation of the financial statements at the Board
meeting. How should he deal with this situation?

A In doing his presentation he should omit any complex issues, so that everybody can understand
what he is saying.

B He should open his presentation with the advice that some of them may not understand all of it.

C He should classify, characterise and present the information clearly and precisely.

D He should deliver his presentation just to those who are financially qualified.

10 Which concept or qualitative characteristic has influenced the decision in (i) above?

A Faithful representation B Verifiability C Accruals D Comparability

11 In looking at issue (ii) above, the accountant decides that the properties should be revalued.

Which concept or qualitative characteristic has been applied in making this decision?

A Materiality B Going concern C Relevance

D Timeliness

12 Because loss on operating the shops, the accountant is considering the issue of going concern. If
it were decided that Lisbon was no longer a going concern at 31 March 20X6, which of the
following would apply in accordance with the Conceptual Framework?

A Financial statements do not need to be prepared.

B All the assets should be liquidated.

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C The financial statements should be prepared on a different basis.

D The financial statements should be prepared as normal and the going concern status disclosed in
the notes.

13.In applying the principle of comparability, how should the change of inventory valuation basis
be accounted for?

A The change should just be disclosed.

B The financial statements for 31 March 20X6 should show both methods.

C The notes should show what the profit would have been if the change had not taken place.

D The financial statements for the prior period as shown at 31 March 20X6 should be restated using
the weighted average basis.

14 The process for developing an International Financial Reporting Standard involves a number of
stages. Following receipt and review of comments on a Discussion Paper, what will be the next step
undertaken by the IASB?

A Publication of an Exposure Draft B Establishment of an Advisory Committee

C Consultation with the Advisory Committee D Issue of a final IFRS

15 Which one of the following would NOT be an advantage of adopting IFRS?

A It would be easier for investors to compare the financial statements of companies with those of
foreign competitors.
B Cross-border listing would be facilitated.
C Accountants and auditors would have more defence in case of litigation.
D Multinational companies could more easily transfer accounting staff across national borders.
16 Which TWO of the following statements regarding systems of regulation of accounting are
true?

A A principles-based system will require more detailed regulations than a rules-based system.
B A rules-based system will tend to give rise to a larger number of accounting standards than a
principles based system.
C A principles-based system seeks to cover every eventuality.
D A principles-based system requires the exercise of more judgement in application than a rules –
based system.
SET-3

1. The IASB’s Conceptual Framework for Financial Reporting identifies characteristics which make
financial information faithfully represent what it purpose to represent.

Which of the following are examples of those characteristics?

(1) Accruals (2) Completeness (3) Going concern (4) Neutrality

A.2 and 3 B. 2 and 4 C. 1 and 4 D. 1 and 2

2. Materiality means that only items having a physical existence may be recognised as assets.

A. True B. False

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3. To comply with the law, the legal form of a transaction must always be reflected in financial
statements. A. True B. False

4. Standards provide guidance on accounting for all types of transaction A. True B. False

5. The accounting concept which requires assets to be valued at their net book value, rather than
their 'breakup' value is the

A. going concern concept B. materiality concept

C. prudence concept D. business entity convention

6. The substance over form convention means that the legal form of a transaction must always be
shown in financial statements even if this differs from the commercial effect. A. True B. False

7. Why is a conceptual framework necessary?

A. to provide concepts on which to build a framework

B. to provide a theoretical basis for preparing financial statements
8. Sales revenue should be recognised when goods and services have been supplied; costs are
incurred when goods and services have been received.

The accounting concept which governs the above is the __________________

A. business entity concept B. materiality concept C. accruals concept

9. The framework assists in harmonising accounting practice A. True B.False

SET-4

Conceptual Framework-1

1.Which of the following is not a purpose of a financial reporting conceptual framework?

A. Development of new reporting practices B. Evaluation of existing reporting practices

C. Enforcement of existing reporting practices

2. Conceptual frameworks limit the consistency and comparability of financial statements.

A. True B. False

3. A conceptual framework for accounting is..

A. A set of financial statements B. A set of rules governing financial reporting

C. A set of components of financial statement D. A set of principles underpinning financial reporting

4.GAAP stands for:

A. Generally accepted accounting principles B. Globally accepted accounting practice

C. Generally allowable accounting principles D. Generally allowable accounting practice

5. Which of the following are components of Generally Accepted Accounting Practice (‘GAAP’)?

A. Stock exchange requirements B. Regional bodies (eg. European Union directives)

C. National accounting standards D. National company law E. All of these

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6. Which of the following is not a chapter of the IASB Framework?

A. The objective of financial statements B. The elements of financial statements

C. Concepts of capital and capital maintenance D. Concepts of income and expenditure

E. Recognition of the elements of financial statements

7. Which of the following is not a disadvantage of having a conceptual framework of accounting?

A. It does not allow for different conceptual bases depending on the user
B. It does not make the setting of accounting standards easier
C. It may hamper the development of preparing accounting standards
D . It may lead to inconsistent accounting practices
8. Which of the following is not an advantage of having a conceptual framework of accounting?

A. Development of accounting standards is subject to less political pressure

B. A consistent balance sheet or income statement approach is used to setting standards
C. Considers the needs of all users
D. Avoids a mixed up approach to setting standards
9. Which of the following relate to financial position in a set of financial statements?

A. Assets, liabilities, income and expenses B. Assets, liabilities and equity

C. Income and expenses D. Income, expenses and liabilities
10.A conceptual framework sets out the detailed accounting treatment of transactions and other
items. A. True B. False

The Concept of A Group-2

11.Your company owns 40% of another company - is that company your subsidiary?

A. No B. Yes

12. Why are FVs used for consideration and NA of the sub at acquisition?

A. It is what all accounts figures should show B. Ensure goodwill is calculated correctly

13. Which of the following would be classified as an associate?

An entity where you..

A. Own 80% of the preference shares

B. Own 55% of the ordinary shares
C. Own 15% of the ordinary shares and have significant influence
14. How much difference can there be (worst case scenario) between a parent's year end and that
of a sub? A. They must always be the same B. 3 months

15. P sells goods to S for 100 - should this 100 be eliminated from the group accounts?

A. Yes B. No

16. Your company owns 40% of another company - You have an arrangement with another
investor who owns 20% that he will vote in line with you - is that company your subsidiary?

A. No B. Yes

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17. If a parent is 100% owned by another company - does it have to prepare group accounts for
itself and its sub? A. No B. Yes

18. Control partly means you have the rights to ________ of returns A. the variability B. 100%

19. Which of the following would NOT be classified as an associate?

An entity where you...

A. acquire 20% of the ordinary shares and have significant influences

B. acquire 70% of the ordinary shares

20. When can a sub have a different year end to a parent?

A. When it is impracticable for the sub B. Never

The Need for A Conceptual Framework-3

21.Financial statements represent transactions in words and numbers.

To be useful, financial information must represent faithfully these transactions in terms of how they
are reported.

Only one of the following four statements regarding faithful representation is true.

Identify that statement, by clicking on the relevant box in the table below, and mark all of the others
as false.

1. Charging the rental payments for an item of plant to profit or loss where the rental agreement
meets the criteria for a right of use asset is an example of faithful representation TRUE
\FALSE

2. Including a convertible loan note in equity on the basis that the holders are likely to choose the
equity option on conversion is an example of faithful representation TRUE\FALSE

3. Derecognising factored trade receivables sold without recourse is an example of faithful

representation TRUE\FALSE

4. Treating redeemable preference shares as part of equity in the statement of financial position is
an example of faithful representation TRUE\FALSE

22. Financial statements represent transactions in words and numbers.

To be useful, financial information must represent faithfully these transactions in terms of how they
are reported.

Which of the following accounting treatments would be an example of faithful representation?

A. Charging the rental payments for an item of plant to profit or loss where the rental agreement
meets the criteria for a right of use asset
B. Including a convertible loan note in equity on the basis that the holders are likely to choose the
equity option on conversion
C. Treating redeemable preference shares as part of equity in the statement of financial position
D. Derecognising factored trade receivables sold without recourse to the seller
23. Which of the following is NOT a purpose of the IASB’s Conceptual Framework?

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A. To assist the IASB in the preparation and review of IFRS

B. To assist auditors in forming an opinion on whether financial statements comply with IFRS
C. To assist in determining the treatment of items not covered by an existing IFRS
D .To be authoritative where a specific IFRS conflicts with the Conceptual Framework
24. Faithful representation is a fundamental characteristic of useful information within the IASB’s
Conceptual framework for financial reporting.

Which of the following accounting treatments correctly applies the principle of faithful
representation?

A. Reporting a transaction based on its legal status rather than its economic substance
B .Excluding a subsidiary from consolidation because its activities are not compatible with those of
the rest of the group
C. Recording the whole of the net proceeds from the issue of a loan note which is potentially
convertible to equity shares as debt (liability)
D. Allocating part of the sales proceeds of a motor vehicle to interest received even though it was
sold with 0% (interest free) finance
25. Comparability is identified as an enhancing qualitative characteristic in the IASB’s Conceptual
framework for financial reporting. Which of the following does NOT improve comparability?

A. Restating the financial statements of previous years when there has been a change of accounting
policy
B. Prohibiting changes of accounting policy unless required by an IFRS or to give more relevant and
reliable information
C. Disclosing discontinued operations in financial statements
D. Applying an entity’s current accounting policy to a transaction which an entity has not engaged in
before
26. The purpose of the Conceptual Framework is to assist in determining the treatment of items
NOT covered by IFRS.Is this statement true or false? A. False B. True

Moo sold a property with a NBV of 4m for 5m in 2015.

The property had an MV of 7m at that date.

Moo has an option to reacquire the property in 2019 for the original sales value of 5m plus an
amount that varies with interest rates between 2015 and 2019.

Moo will continue to occupy the property

27.How should this be dealt with in the accounts?

A. It's shown as a sale at the FV B. It's shown as a loan

28. If an IFRS disagrees with the conceptual framework - then what should be followed?

A. The framework B. The IFRS

29. Showing discontinued operations separately from continuing on the income statement is a
feature of what fundamental information characteristic?

A. Relevance B. Faithful Representation

30. Where does faithful representation fit?

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A. Enhancing characteristic B. Fundamental characteristic

31. Predictive and _________ values are part of the fundamental characteristic of useful
information called relevance A. Confirmatory B.Illustrative

32. Which of the following is a purpose of the Conceptual Framework? Pick 2 options

A. To be authoritative where a specific IFRS conflicts wth the Conceptual Framework

B. To be a reference when the issue isn't covered by IFRS
C. To assist the IASB in the preparation of IFRS
33. If information is complex should it be included in the accounts?

A. No - it limits understandability B. Yes if relevant

34. What are the limitations to Faithful Representation? Pick 2 options

A. Inherent uncertainties and estimates B. Assumptions C. Substance over form

35. A conceptual framework is a basis for resolving accounting ________?

A. equations B. disputes / Issues

FRAMEWORK-4

36. Showing discontinued operations separately from continuing on the income statement is a
feature of what fundamental information characteristic?

A. Faithful Representation B. Relevance

37. If information is complex should it be included in the accounts?

A. Yes if relevant B. No - it limits understand ability

38. If an IFRS disagrees with the conceptual framework - then what should be followed?

A. The framework B. The IFRS

39. Which would lead to more comparable financial statements between companies..?

A. Rules based system B. Principles based framework

40. Where does faithful representation fit?

A. Enhancing characteristic B. Fundamental characteristic

Moo sold a property with a NBV of 4m for 5m in 2015.

The property had an MV of 7m at that date.

Moo has an option to reacquire the property in 2019 for the original sales value of 5m plus an
amount that varies with interest rates between 2015 and 2019.

Moo will continue to occupy the property

41.How should this be dealt with in the accounts?

A. It's shown as a loan B. It's shown as a sale at the FV

42. What are the limitations to Faithful Representation? Pick 2 options

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A. Inherent uncertainties and estimates B. Substance over form C. Assumptions

43. Predictive and _________ values are part of the fundamental characteristic of useful
information called relevance A. Confirmatory B. Illustrative

44. The purpose of the Conceptual Framework is to assist in determining the treatment of items
NOT covered by IFRS. Is this statement true or false? A.False B. True

45. A conceptual framework is a basis for resolving accounting ________?

A. equations B. disputes / Issues

46. When can a sub have a different year end to a parent?

A. When it is impracticable for the sub B. Never

47. Which of the following would NOT be classified as an associate?

An entity where you...

A. acquire 70% of the ordinary shares

B. acquire 20% of the ordinary shares and have significant influences

48. If a parent is 100% owned by another company - does it have to prepare group accounts for
itself and its sub? A. No B. Yes

49. Which of the following would be classified as an associate?

An entity where you..

A. Own 80% of the preference shares B. Own 55% of the ordinary shares

C. Own 15% of the ordinary shares and have significant influence

50. Your company owns 40% of another company - You have an arrangement with another
investor who owns 20% that he will vote in line with you - is that company your subsidiary?

A. Yes B. No

51. Control means rights to the variability of returns and also..

A. power to influence them B. power to make decisions

52. P sells goods to S for 100 - should this 100 be eliminated from the group accounts?

A. Yes B. No

53. Control partly means you have the rights to ________ of returns A. the variability B. 100%

54. How much difference can there be (worst case scenario) between a parent's year end and that
of a sub? A. 3 months B. They must always be the same

55. Why are FVs used for consideration and NA of the sub at acquisition?

A. Ensure goodwill is calculated correctly B. It is what all accounts figures should show

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