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Accredited Financial Examiner (AFE) Questions 66–70 (page: 15)

Updated On: 10-Feb-2026

Which are components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker in deciding how to allocate resources and in assessing performance?

  1. Service acts
  2. Performance segments
  3. Control segments
  4. Operating segments

Answer(s): D



It usually is acceptable to use the subsidiary's statements if the difference in fiscal periods is:

  1. not more than 2 months
  2. not more than 3 months
  3. not more than 4 months
  4. not more than 5months

Answer(s): B



Which of the following is NOT included when initial acquisition of Subsidiary, Controlled and Affiliated Entities (SCA) is recorded as the sum of?

  1. any cash payment
  2. the fair value of other assets distributed
  3. the fair value of any expenses
  4. any direct costs of the acquisition

Answer(s): C



The name of each Subsidiary, Controlled and Affiliated (SCA) entity and percentage of ownership of common stock must be put to disclosure when:

  1. For all investments in SCA entities that exceed 20 percent of the total admitted expenses of the insurer.
  2. For all investments in SCA entities that exceed 15 percent of the total admitted liabilities of the insurer.
  3. For half of the investments in SCA entities that exceed 6 percent of the total admitted assets of the insurer.
  4. For all investments in SCA entities that exceed 10 percent of the total admitted assets of the insurer.

Answer(s): D



The difference between the carrying value of the parent's investment in subsidiary and the amount received is treated as a gain or loss in the:

  1. parent's income statement
  2. subsidiary's revenue statement
  3. parent's financial statement
  4. subsidiary's income statement

Answer(s): A



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