Consolidation under MPERS

Multiple-choice questions: In order to be awarded CPD units you must answer the following five random questions correctly. If you fail the test, please re-read the article before attempting the questions again

  1. In accordance with Section 9 of MPERS, under what circumstances is a parent exempted from consolidating its subsidiaries?

  2. Under the PERS framework, a parent is exempted from consolidating its subsidiary if it operates under severe long term restrictions. How is the treatment for such instances under Section 9 of MPERS?

  3. In terms of consolidation procedures, Section 9 requirements remain largely similar to that under the PERS framework. However, when it comes to the measurement of non-controlling interests (minority interests under the PERS framework), there is a significant difference. How is non-controlling interests accounted for under MPERS?

  4. Under Section 14 of MPERS, an entity is given an accounting policy CHOICE to account for its associates using -

  5. How does an investor measure its investment in associates under the cost model of the MPERS framework?

  6. The following are TRUE in relation to measuring investments in associates using the fair value model, EXCEPT -

  7. A joint venture is a contractual arrangement whereby two or more parties undertake an economic activity that is subject to joint control; which is the cornerstone in accounting for joint ventures. Joint ventures can take the following forms -

  8. Jointly-controlled operations (JCO) involves the use of the assets and other resources of the venturers rather than the establishment of a corporation, partnership or other entity, or a financial structure that is separate from the venturers themselves. How do venturers account for JCOs?

  9. This arrangement involves the joint control and often the joint ownership, by the venturers of one or more assets contributed to, or acquired for the purpose of, the joint venture and dedicated to the purposes of the joint venture. This arrangement best describes -

  10. The following is TRUE about special purpose entities (SPE), EXCEPT for?