Question

Petre owns 100% of the share capital of the following companies. The directors are unsure of whether
the investments should be consolidated.
In which of the following circumstances would the investment NOT be consolidated?

A. Petre has decided to sell its investment in Alpha as it is loss-making; the directors believe its exclusion
from consolidation would assist users in predicting the group's future profits

B. Beta is a bank and its activity are so different from the engineering activities of the rest of the
group that it would be meaningless to consolidate it

C. Delta is in a country where local accounting standards are compulsory, and these are not
compatible with IFRS used by the rest of the group

D. Gamma is in a country where a military coup has taken place and Petre has lost control of the
investment for the foreseeable future
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Answer 1

Answer:

D,C,A are incorrect answers