loses significant influence over the associate, the balance of the investment in the associate is recorded
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If it loses significant influence over the associate, the balance of the investment in the associate is recorded at:
A. Fair value
B. Identifiable net asset property
C. Cost method
D. Keep the equity method
Step by step
Solved in 2 steps
- 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 adjustmentsHow is the impairment test carried out for an associate? A. The goodwill is impairment tested individually. B. The entire carrying amount of the investment is tested for impairment by comparing the recoverable amount with the carrying amount. C. The carrying amount of the investment shall be compared with the market value. D. The recoverable amounts of all investments in associates shall be associated together.According to PAS 28, investments in associates are accounted for at fair value. using the equity method. using the asset method. at cost.
- 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.Equity accounting for intercorporate investment relies on book value. But if the ownership is an investment, how does fair value accounting enter in? Should it be considered at all?Which of the following is measured at fair value with fair value changes recognized in profit or loss? a. held to maturity investments b. financial assets designated at FVPL c. FVOCI d. all of these
- Transfers of investments between categories a. Should always affect net income b. Are accounted for at fair value for all transfers c. Result in omitting recognition of fair value in the year of the transfer. d. Are not recognized if investments are transferred from held for collection to fair valueUnder fair-value accounting for an equity investment, which of the following affects the income the investor recognizes from its ownership of the investee? The investee’s reported income adjusted for excess cost over book value amortizations. Changes in the fair value of the investor’s ownership shares of the investee. Intra-entity profits from upstream sales. Other comprehensive income reported by the investee.If an entity has elected to use the fair value option for a financial liability; a. It is measured at fair value through other comprehensive income. b. It is measured at fair value through profit or loss. c. It is measured at amortized cost. d. Fair value op don is prohibited for financial liabilities.
- When using the fair value method, we adjust the reported amount of the investment for changes in fair value after its acquisition. How is the change in fair value reflected in the income statement?Which statement is correct about goodwill related to investments in associates? a. It is presented as an asset in the consolidated balance sheet b. It is reflected in the carrying amount of investments and not separately presented in the consolidated balance sheet. c. There is no goodwill in investments in associates. d. Goodwill is recognised in the share of profits or losses.Which of the following is not a category of financial assets under GAM? Group of answer choices A.Held to maturity investments B.Available for sale financial assets C.Financial asset at fair value through other comprehensive income D.Loans and receivable