Equity method: ongoing work

What does the equity method include in the financial statements?

One line in the statement of financial position and statement of profit or loss

The acquired percentage of assets, liabilities, income and expenses of the acquired entity

Holding the investment at fair value through profit or loss

100% of the assets, liabilities, income and expenses of the acquired entity

How should contingent consideration be included on acquisition?

Only include if probable that it will be paid

Disclosed but not included

At present value

At fair value

Which, if any, of the following statements are true? Statement 1, the equity method is applied to accounting for associates, or statement 2, the equity method is applied to accounting for joint ventures

Neither statement

Statement 1 only

Both statements

Statement 2 only

What is the proposed treatment for a sale of a subsidiary to an associate?

Hold any gain/loss in a reserve until full disposal by the associate

No gain/loss recognised

Full gain/loss recognised on disposal

Limit the gain/loss recognised to the share of the unowned part of the associate

An entity should account for an investment as an associate with what level of power?

Significant influence

Control

Joint control

No influence

How should losses be recorded in relation to the associate?

Up until the investment value reaches zero, then stop recording

All losses to be recognised in Other Comprehensive Income

None of the above

Continue to recognise losses with no restrictions

Where is the non-controlling interest for an associate shown in the statement of profit or loss?

At the bottom of the statement

After operating profit

After gross profit

It is not shown in relation to an associate

Which of these statements is true regarding acquisitions under the equity method? Statement 1, the net assets of the associate are included at fair value, or statement 2, any deferred tax asset/liability arising is included in the carrying amount of the investment

Statement 1 only is true

Statement 2 only is true

Neither statement is true

Both statements are true

What is the next step in the process for the equity method project?

Exposure draft

Issue a new IFRS Accounting Standard

Begin a research project

It will be ended

Which, if any, of the following statements is correct? Statement 1, the IASB has tried to address a mismatch with IFRS 10, Business Combinations, or statement 2, the IASB have tried to address a mismatch with IFRS 15, Revenue from Contracts with Customers

Statement 1 only is correct

Neither statement is correct

Statement 2 only is correct

Both statements are correct

Equity method: ongoing work

What does the equity method include in the financial statements?

How should contingent consideration be included on acquisition?

Which, if any, of the following statements are true? Statement 1, the equity method is applied to accounting for associates, or statement 2, the equity method is applied to accounting for joint ventures

What is the proposed treatment for a sale of a subsidiary to an associate?

An entity should account for an investment as an associate with what level of power?

How should losses be recorded in relation to the associate?

Where is the non-controlling interest for an associate shown in the statement of profit or loss?

Which of these statements is true regarding acquisitions under the equity method? Statement 1, the net assets of the associate are included at fair value, or statement 2, any deferred tax asset/liability arising is included in the carrying amount of the investment

What is the next step in the process for the equity method project?

Which, if any, of the following statements is correct? Statement 1, the IASB has tried to address a mismatch with IFRS 10, Business Combinations, or statement 2, the IASB have tried to address a mismatch with IFRS 15, Revenue from Contracts with Customers

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