Cpa Review School Of The Philippines

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CPA REVIEW SCHOOL OF THE PHILIPPINES
Manila
ADVANCED FINANCIAL ACCOUNTING
GERMAN/LIM/VALIX/K. DELA CRUZ/MARASIGAN
CONSOLIDATION SUBSEQUENT TO THE DATE OF ACQUISITION
Part I: Theory of Accounts
1. Statement 1: The impairment of Goodwill arising from acquisition is allocated between the Parent and
the NCI by using the Controlling and Noncontrolling interest percentage, respectively.
Statement 2: Under the partial goodwill approach, a portion of the goodwill impairment will be
considered a deduction from the Subsidiary Net Income for purposes of determining the NCI in the NI
of Subsidiary.
a. Both statements are true
b. Both statements are false
c. Statement 1 is true while statement 2 is false
d. Statement 1 is false while statement 2 is true
2. Statement 1: Excess attributable to undervaluation or overvaluation related to inventories of the
subsidiary on acquisition date is amortized upon sale.
Statement 2: Amortization of an overvaluation related to depreciable assets of the subsidiary on
acquisition date is considered a deduction for purposes of computing the consolidated net income, net
income attributable to parent, and NCI in Net Income of the Subsidiary.
a. Both statements are true
b. Both statements are false
c. Statement 1 is true while statement 2 is false

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