QUESTION 1

(a) Explain on the group concept and the circumstances where a group is required to prepare consolidated financial statements. Also discuss when a parent company may not be required to prepare consolidated financial statements under IFRS 10 Consolidated Financial Statements.

(7 marks)

(b) Explain the key steps in preparing consolidated statement of financial position. Your answer should include discussion on goodwill, non-controlling interests, pre and post - acquisition profits and inter-company balances. Example may be used for illustration.

(12 marks)

(c) Discuss on the application of the equity method in preparing consolidated financial statements.

(6 marks)