MC Question 10
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 |
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| B | Beta is a bank and its activity is so different from the engineering activities of the rest of the group that it would be meaningless to consolidate it |
| C | Delta is located 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 located in a country where a military coup has taken place and Petre has lost control of the investment for the foreseeable future |