1 Groups and consolidation: an overview

QUESTION 
Consolidated non-current assets
 
Apple Co owns 60% of Pear Co. Apple has non-current assets of $80,000 and Pear has non-current 
assets of $50,000. 
Consolidated non-current assets is calculated as: 
$
Apple 80,000 
Pear 60% × $50,000 
30,000 
110,000 
True or false? Explain your answer. 
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CHAPTER 23
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INTRODUCTION TO CONSOLIDATED FINANCIAL STATEMENTS 
 
407 
ANSWER 
False. The correct calculation is: 
$
Apple 80,000 
Pear 
50,000 
130,000 
Pear is a subsidiary of Apple, which controls 
all
its non-current assets, not just 60%. The 40% non-
controlling interest is accounted for separately.
QUESTION 
Consolidated receivables
 
Apple Co owns 60% of Pear Co. Apple has receivables of $60,000 and Pear has receivables of 
$40,000. Pear owes Apple $10,000. What are consolidated receivables? 
A $74,000 
B $84,000 
C $90,000 
D $100,000 
ANSWER 
C 
Consolidated receivables 
$
Apple 60,000 
Less intra-group 
(10,000) 
50,000 
Pear 
40,000 
Consolidated 
90,000 
QUESTION 
Consolidated payables
 
Apple Co owns 60% of Pear Co. Pear has payables of $90,000, of which $10,000 is owed to Apple. 
Apple has payables of $120,000.
Required 
Calculate the consolidated payables balance.
ANSWER 
Consolidated payables 
$
$
Apple
120,000 
Pear 
90,000
Less intra-group 
(10,000)
80,000 
200,000