Which of the following statements is in accordance with AASB 10 Consolidated Financial Statements with respect to multiple acquisitions?
A) Each individual investment in the subsidiary is accounted for separately and separate consolidation worksheet entries are made to eliminate each investment on consolidation.
B) Once control of the subsidiary is established, consolidation worksheet entries will eliminate the parent entity's respective share of the subsidiary's net identifiable assets as at each of the respective investment dates (at fair value).
C) The aggregate costs of the investments would be eliminated against the parent's share of capital and reserves at the date when control is ultimately established and only one amount of goodwill (or bargain gain on purchase) is calculated.
D) Because eliminations of each investment are made at the various investment dates, there is a need to calculate a separate amount of goodwill (bargain gain on purchase) for each investment date.

Question

Quizplus · Accepted Answer

AASB 10 requires that when control is ultimately established over multiple investments in the same subsidiary, the aggregate cost of the investments is eliminated against the parent's share of capital and reserves at that date, resulting in only one amount of goodwill or bargain gain on purchase. This is in contrast to option A and D which suggest separate consolidation for each individual investment, and option B which suggests eliminating the parent's share of the subsidiary's net identifiable assets as at each investment date.

Which of the Following Statements Is in Accordance with AASB