2.Gains and losses resulting from intercompany transactions between an investor and an associate are eliminated in the investor’s financial statements to the extent of the investor’s share eliminated in full in the investor’s financial statements recognized in the investor's financial statements only to the extent of the investor's interest in the associate not given special accounting

2.Gains and losses resulting from intercompany transactions between an investor and an associate are eliminated in the investor’s financial statements to the extent of the investor’s share eliminated in full in the investor’s financial statements recognized in the investor's financial statements only to the extent of the investor's interest in the associate not given special accounting

SWFT Essntl Tax Individ/Bus Entities 2020

23rd Edition

ISBN:9780357391266

Author:Nellen

Publisher:Nellen

Chapter18: Comparative Forms Of Doing Business

Section: Chapter Questions

Problem 5P

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Similar questions

When two or more investors exercise joint control over an investee, the investors must use the equity method of accounting to recognise the investee in their consolidated financial statements. Select one: True False
If an associate incurs losses, the investor is required to________. Select one: a. recognise the losses only to the point where the carrying amount of the investment is equal to zero b. reclassify the investment as current assets c. recognise the losses only to the point where the carrying amount of the investment is equal to the initial investment d. ignore the losses for the purposes of equity accounting adjustments
The investor’s interest in an associate for purposes of recognizing its share of losses of an associate is I. The carrying amount of the investment in the associate determined using the equity method. II. Any long-term interests that, in substance, form part of the entity’s net investment in the associate. choices I only. II only. Both I and II. Higher of I and II.
An individual provides accounting services to a corporation in exchange for stock. the shareholder must recognize income and the corporation may deduct or capitalize the expenditure as would be deemed appropriate. A. True B. False
1. PAS 28 defines an ‘associate’ as Choices An entity that controls one or more entities. An entity over which the investor has significant influence. A joint arrangement whereby the parties that have joint control of the arrangement have rights to the net assets of the arrangement. An entity that is controlled by another entity. 2. In accordance with PAS 1, which of the following gains or losses from reclassification of financial assets need not be presented separately in the profit or loss section or the statement of profit or loss? Choices None of these. Reclassification of financial assets out of the FVTOCI measurement category to FVTPL. Reclassification of financial assets out of the amortized cost measurement category to FVTPL. Reclassification of financial assets out of the FVTPL measurement category.
19. Which of the following is not an example of financial statements that use a special purpose financial reporting framework? Group of answer choices Of a partnership which follows accounting practices used to file its tax return. Prepared for limited purposes such as relating to a contract a company has entered into. Of an organization that has limited the scope of the auditor's examination. Of an organization that follows procedures of a regulatory agency that oversees the company and its operations.
Choose the correct. Under fair-value accounting for an equity investment, which of the following affects the income the investor recognizes from its ownership of the investee?a. The investee’s reported income adjusted for excess cost over book value amortizations.b. Changes in the fair value of the investor’s ownership shares of the investee.c. Intra-entity profits from upstream sales.d. Other comprehensive income reported by the investee.
Which of the following statements is consistent with the principle of control as defined by IFRS 10 Consolidated Financial Statements? a. The investor must be exposed to a return from the investee. b. The investor has the ability to use its power over the investee to affect the amount of the returns from the investee. c. An investor yet to direct the relevant activities of an investee has no power over the investee. d. An investor cannot have control over an investee if another investor has existing rights to participate in the direction of the relevant activities.
If the share of losses on realization of the sale of noncash assets exceed the balance in a partner's capital account, the resulting balance is called a deficiency. Group of answer choices True False
Which of the following statement(s) is / are correct on the accounting for an associate in the consolidated statement of profit or loss? PLEASE PROVIDE EXPLAINATION THANK YOU. (I) The associate's income and expenses are added to those of the group on a line-by-line basis. (II) The group share of the associate's income and expenses is added to the group figures on a line-by-line basis. (III) Only dividends received from the associate are recorded in the consolidated statement of profit or loss. A) (I) B) (I) and (II) C) (I) and (III) D) (II) and (III) E) None of the above.
An investment in an associate is normally accounted for using the equity accounting method. This method requires thatthe investment in the associate is__________.Select one:a.initially recorded at cost and not adjusted thereafterb.initially recorded at cost and then adjusted in each subsequent accounting period to reflect the investor’s share ofthe associate’s profit or loss for the yearc.initially recorded at cost and then adjusted to fair value at each subsequent reporting periodd.initially recorded at fair value and the only adjustments are for dividend income that is declared and paid
A partner's withdrawal of assets from a LLP that is considered a permanent reduction in that partner's equity is debited to the partner's: Select one :- a. Retained Earnings account b. Loan Receivable account c. Drawing account d. Capital account