In a consolidated group of entities, control over the subsidiaries in the group:

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The question provided is: In a consolidated group of entities, control over the subsidiaries in the group:

However, there are no answer options listed to analyze each choice specifically. Without the available options, I cannot methodically compare each statement as requested. Instead, I can offer general guidance on the concept, which may help you evaluate any options you encounter.

General concept: In a consolidated group, there is typically a parent entity and its subsidiaries. The parent is said to have control over the subsidiaries when it has power to govern the financial and operating policies of the subsidiaries so as to obtain benefits from their activities. This control usually arises from ownership of a majority of the voting rights or other arrangements that give the parent the practical ability to direct relevant activities. In consolidation accounting, the parent and its subsidiaries are combined for financial reporting, and non-controlling interests are presented separately.

About the idea of control being shared: In the context of consolidated subsidiaries, control is generally not shared in the sense of co–owning or jointly controlling the subsidiary within the consolidation framework. Shared or joint control is a characteristic of joint ventures or jointly controlled entities, which are accounted for differently (e.g., equity method or proportionate consolidation under certain frameworks) and are not consolidated in the same way as wholly owned or majority-owned subsidiaries.

Possible misinterpretations to avoid: Some statements might imply that control cannot be exercised collaboratively with other parties in a consolidated structure. While a parent can have control, there can still be arrangements with other investors that affect the subsidiary (e.g., non-controlling interests or minority protections). What matters for consolidation is whether the parent has control, not whether control is shared in every sense. If a question specifically asks about “shared control,” it is often signaling joint control scenarios which are not treated as consolidated subsidiaries under standard consolidation rules.

If you can provide the missing answer options, I can walk through each one in turn, explaining why it is correct or incorrect, and tie each to the underlying consolidation principle (control, power to direct relevant activities, exposure to variable returns, and the existence of non-controlling interests).

22754 Corporate Accounting - Autumn 2025 Online Self-study Quiz (Module 2A)

In a consolidated group of entities, control over the subsidiaries in the group:

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The key characteristic that determines when consolidated financial statements should be prepared is:

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AASB 10 Consolidated Financial Statements defines a ‘parent’ and a ‘subsidiary’ as which of the following?

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