1..On what basis may a subsidiary be excluded from consolidation?

A .The activities of the subsidiary are dissimilar to the activities of the rest of the group. B. The subsidiary was acquired with the intention of reselling it after a short period of time. C.The subsidiary is based in a country with strict exchange controls which make it difficult for it to transfer funds to the parent. D. The parent looses control over the subsidiary

2. When negative goodwill arises, IFRS 3 Business combinations requires that the amounts involved in computing goodwill should first be reassessed. When the amount of the negative goodwill has been confirmed, how should it be accounted for?

A. Charged as an expense in profit or loss B. Capitalized and presented under non-current assets C. Credited to profit or loss D. Shown as a deduction from non-current assets

3. Which of the following is the criterion for treatment of an investment as an associate?

A. Ownership of a majority of the equity shares B. Ability to exercise control C. Existence of significant influence D. Exposure to variable returns from involvement with the investee

4. Which TWO of the following statements are correct when preparing consolidated financial statements?

I. A subsidiary cannot be consolidated unless it prepares financial statements to the same reporting date as the parent. II A subsidiary with a different reporting date may prepare additional statements up to the group reporting date for consolidation purposes. III A subsidiary's financial statements can be included in the consolidation if the gap between the parent and subsidiary reporting dates is five months or less. IV Where a subsidiary's financial statements are drawn up to a different reporting date from those of the parent, adjustments should be made for significant transactions or events occurring between the two reporting dates.

A. I and II B. II and IV C. III and IV D. I and III