Answer the following questions:

1. A family owns a drug store and a manufacturing facility. These operations are separately managed by non family members. The family is seeking a bank loan. The bank has requested combined financial statements be prepared using US GAAP.

Is this presentation acceptable under US GAAP or IFRS? Explain your answer.

2. Parent Company (PC) is a public company, which prepares consolidated financial statements that are available to the public. PC owns 80% of Company B. Company B owns 100% of Company C. Neither Company B nor Company C is a public company, but both have prepared separate audited financial statements. All the shareholders of PC and Company B are looking for ways to reduce costs. A suggestion has been made not to consolidate Company C into Company B, which would result in a significant cost reduction.

Is this a viable suggestion under US GAAP? Is this a viable suggestion under IFRS? Explain your answers.