Question 1

Where a joint venture is a partnership:

Accepted Answer

A)  It should be accounted for by the venturer using the equity method. 
B)  It should be accounted for by the venturer using partnership accounting separately to the financial accounts of the venturers and any profit on sale of the output from the joint venture reported in the income statement of the individual venturers. 
C)  It should be accounted for by the venturer as a partnership and the line items added into the group's financial statements. 
D)  It should be accounted for using full consolidation accounting. 
A)  It should be accounted for by the venturer using the equity method. 
B)  It should be accounted for by the venturer using partnership accounting separately to the financial accounts of the venturers and any profit on sale of the output from the joint venture reported in the income statement of the individual venturers. 
C)  It should be accounted for by the venturer as a partnership and the line items added into the group's financial statements. 
D)  It should be accounted for using full consolidation accounting.

Question 2

The requirements of AASB 128 relating to the equity method of accounting for investments in associates include:

Accepted Answer

A)  adjustments for impairment losses recognised by the associate. 
B)  the notional adjustment of the carrying amounts of the identifiable assets, liabilities and contingent liabilities of the associate to fair value. 
C)  the calculation of a notional goodwill or excess on acquisition that is not required to be separately disclosed. 
D)  all of the given answers. 
A)  adjustments for impairment losses recognised by the associate. 
B)  the notional adjustment of the carrying amounts of the identifiable assets, liabilities and contingent liabilities of the associate to fair value. 
C)  the calculation of a notional goodwill or excess on acquisition that is not required to be separately disclosed. 
D)  all of the given answers.

Question 3

A joint arrangement that is not structured through a separate vehicle is called:

Accepted Answer

A)  a joint venture. 
B)  a joint operation. 
C)  an expense joint venture or a joint operation. 
D)  a partnership. 
A)  a joint venture. 
B)  a joint operation. 
C)  an expense joint venture or a joint operation. 
D)  a partnership.

Question 4

Explain the term 'significant influence',and how it is determined,including several factors that need to be considered when making such determination

Accepted Answer

Significant influence refers to the powe

Question 5

Sting Ltd and Pink Ltd enter into a contractual agreement to form a joint arrangement which is considered to be a joint operation on 1 July 2014.Sting Ltd is to contribute land and production buildings and equipment.Pink Ltd agrees to contribute $8.1 million in cash.It is agreed that they will share output,assets and future contributions in the ratio 50: 50.The following information relates to the contribution by Sting Ltd. $$\begin{array} { | l | r | r | } 
\hline & \begin{array} { r } 
\text { Book value } \
( \$ 000 )
\end{array} & \begin{array} { r } 
\text { Fair value (agreed) } \
( \$ 000 )
\end{array} \
\hline \text { Land } & 3500 & 4000 \
\hline \text { Buildings } & 1900 & 2000 \
\hline \text { Equipment } & 1300 & 2100 \
\hline
\end{array}$$ What are the entries to record the formation of the joint operation in the books of Sting Ltd and Pink Ltd?

Accepted Answer

A) 
$\begin{array}{l}
\text { Sting Ltd's books: }\
\begin{array}{|c|l|r|r|}
\hline & & (\$ 000) & (\$ 000) \
\hline \mathrm{Dr} & \text { Cash } & 3350 & \
\hline \mathrm{Cr} & \text { Land } & & 1750 \
\hline \mathrm{Cr} & \text { Buildings } & & 950 \
\hline \mathrm{Cr} & \text { Equipment } & & 650 \
\hline & & & \
\hline
\end{array}
\end{array}$

$\begin{array}{l}
\text { Pink Ltd's books: }\
\begin{array}{|l|l|r|r|}
\hline \mathrm{Dr} & \text { Land } & 1750 & \
\hline \mathrm{Dr} & \text { Buildings } & 950 & \
\hline \mathrm{Dr} & \text { Equipment } & 650 & \
\hline \mathrm{Cr} & \text { Cash } & & 3350 \
\hline
\end{array}
\end{array}$ 
B) 
$\begin{array}{l}
\text { Sting Ltd's books: }\
\begin{array}{|c|l|r|r|}
\hline & & (\$ 000) & (\$ 000) \
\hline \mathrm{Dr} & \text { Cash } & 4050 & \
\hline \mathrm{Cr} & \text { Land } & & 1750 \
\hline \mathrm{Cr} & \text { Buildings } & & 950 \
\hline \mathrm{Cr} & \text { Equipment } & & 650 \
\hline \mathrm{Cr} & \text { Profit on sale of land } & & 250 \
\hline \mathrm{Cr} & \text { Profit on sale of buildings } & & 50 \
\hline \mathrm{Cr} & \text { Profit on sale of equipment } & & 400 \
\hline & & & \
\hline
\end{array}
\end{array}$

$\begin{array}{l}
\text { Pink Ltd's books: }\
\begin{array}{|l|l|r|r|}
\hline \text { Dr } & \text { Land } & 1750 & \
\hline \mathrm{Dr} & \text { Buildings } & 950 & \
\hline \mathrm{Dr} & \text { Equipment } & 650 & \
\hline \mathrm{Dr} & \text { Investment in JO } & 4750 & \
\hline \mathrm{Cr} & \text { Cash } & & 8100 \
\hline
\end{array}
\end{array}$ 
C) 
$\begin{array}{l}
\text { Sting Ltd's books: }\
\begin{array}{|c|l|r|r|}
\hline & & (\$ 000) & (\$ 000) \
\hline \mathrm{Dr} & \text { Investment in JO } & 4050 & \
\hline \mathrm{Cr} & \text { Land } & & 1750 \
\hline \mathrm{Cr} & \text { Buildings } & & 950 \
\hline \mathrm{Cr} & \text { Equipment } & & 650 \
\hline \mathrm{Cr} & \text { Asset revaluation reserve } & & 700 \
\hline & & & \
\hline
\end{array}
\end{array}$

$\begin{array}{l}
\text { Pink Ltd's books: }\
\begin{array}{|l|l|r|r|}
\hline \mathrm{Dr} & \text { Investment in JO } & 4050 & \
\hline \mathrm{Cr} & \text { Cash } & & 4050 \
\hline
\end{array}
\end{array}$ 
D) 
$\begin{array}{l}
\text { Sting Ltd's books: }\
\begin{array}{|r|l|r|r|}
\hline & & (\$ 000) & (\$ 000) \
\hline \mathrm{Dr} & \text { Cash } & 4050 & \
\hline \mathrm{Cr} & \text { Land } & & 1750 \
\hline \mathrm{Cr} & \text { Buildings } & & 950 \
\hline \mathrm{Cr} & \text { Equipment } & & 650 \
\hline \mathrm{Cr} & \text { Profit on sale of land } & & 250 \
\hline \mathrm{Cr} & \text { Profit on sale of buildings } & & 50 \
\hline \mathrm{Cr} & \text { Profit on sale of equipment } & & 400 \
\hline & & & \
\hline
\end{array}
\end{array}$

$\begin{array}{l}
\text { Pink Ltd's books: }\
\begin{array}{|l|l|r|r|}
\hline \text { Dr } & \text { Land } & 2000 & \
\hline \text { Dr } & \text { Buildings } & 1000 & \
\hline \mathrm{Dr} & \text { Equipment } & 1050 & \
\hline \mathrm{Cr} & \text { Cash } & & 4050 \
\hline
\end{array}
\end{array}$ 
A) 
$\begin{array}{l}
\text { Sting Ltd's books: }\
\begin{array}{|c|l|r|r|}
\hline & & (\$ 000) & (\$ 000) \
\hline \mathrm{Dr} & \text { Cash } & 3350 & \
\hline \mathrm{Cr} & \text { Land } & & 1750 \
\hline \mathrm{Cr} & \text { Buildings } & & 950 \
\hline \mathrm{Cr} & \text { Equipment } & & 650 \
\hline & & & \
\hline
\end{array}
\end{array}$

$\begin{array}{l}
\text { Pink Ltd's books: }\
\begin{array}{|l|l|r|r|}
\hline \mathrm{Dr} & \text { Land } & 1750 & \
\hline \mathrm{Dr} & \text { Buildings } & 950 & \
\hline \mathrm{Dr} & \text { Equipment } & 650 & \
\hline \mathrm{Cr} & \text { Cash } & & 3350 \
\hline
\end{array}
\end{array}$ 
B) 
$\begin{array}{l}
\text { Sting Ltd's books: }\
\begin{array}{|c|l|r|r|}
\hline & & (\$ 000) & (\$ 000) \
\hline \mathrm{Dr} & \text { Cash } & 4050 & \
\hline \mathrm{Cr} & \text { Land } & & 1750 \
\hline \mathrm{Cr} & \text { Buildings } & & 950 \
\hline \mathrm{Cr} & \text { Equipment } & & 650 \
\hline \mathrm{Cr} & \text { Profit on sale of land } & & 250 \
\hline \mathrm{Cr} & \text { Profit on sale of buildings } & & 50 \
\hline \mathrm{Cr} & \text { Profit on sale of equipment } & & 400 \
\hline & & & \
\hline
\end{array}
\end{array}$

$\begin{array}{l}
\text { Pink Ltd's books: }\
\begin{array}{|l|l|r|r|}
\hline \text { Dr } & \text { Land } & 1750 & \
\hline \mathrm{Dr} & \text { Buildings } & 950 & \
\hline \mathrm{Dr} & \text { Equipment } & 650 & \
\hline \mathrm{Dr} & \text { Investment in JO } & 4750 & \
\hline \mathrm{Cr} & \text { Cash } & & 8100 \
\hline
\end{array}
\end{array}$ 
C) 
$\begin{array}{l}
\text { Sting Ltd's books: }\
\begin{array}{|c|l|r|r|}
\hline & & (\$ 000) & (\$ 000) \
\hline \mathrm{Dr} & \text { Investment in JO } & 4050 & \
\hline \mathrm{Cr} & \text { Land } & & 1750 \
\hline \mathrm{Cr} & \text { Buildings } & & 950 \
\hline \mathrm{Cr} & \text { Equipment } & & 650 \
\hline \mathrm{Cr} & \text { Asset revaluation reserve } & & 700 \
\hline & & & \
\hline
\end{array}
\end{array}$

$\begin{array}{l}
\text { Pink Ltd's books: }\
\begin{array}{|l|l|r|r|}
\hline \mathrm{Dr} & \text { Investment in JO } & 4050 & \
\hline \mathrm{Cr} & \text { Cash } & & 4050 \
\hline
\end{array}
\end{array}$ 
D) 
$\begin{array}{l}
\text { Sting Ltd's books: }\
\begin{array}{|r|l|r|r|}
\hline & & (\$ 000) & (\$ 000) \
\hline \mathrm{Dr} & \text { Cash } & 4050 & \
\hline \mathrm{Cr} & \text { Land } & & 1750 \
\hline \mathrm{Cr} & \text { Buildings } & & 950 \
\hline \mathrm{Cr} & \text { Equipment } & & 650 \
\hline \mathrm{Cr} & \text { Profit on sale of land } & & 250 \
\hline \mathrm{Cr} & \text { Profit on sale of buildings } & & 50 \
\hline \mathrm{Cr} & \text { Profit on sale of equipment } & & 400 \
\hline & & & \
\hline
\end{array}
\end{array}$

$\begin{array}{l}
\text { Pink Ltd's books: }\
\begin{array}{|l|l|r|r|}
\hline \text { Dr } & \text { Land } & 2000 & \
\hline \text { Dr } & \text { Buildings } & 1000 & \
\hline \mathrm{Dr} & \text { Equipment } & 1050 & \
\hline \mathrm{Cr} & \text { Cash } & & 4050 \
\hline
\end{array}
\end{array}$

Question 6

Outline the arguments for and against the use of equity accounting,relative to cost method,when accounting for an investment.

Accepted Answer

The use of equity accounting and the cos

Question 7

Which of the following are categories that are commonly used to classify investments?

Accepted Answer

A)  equity investments and property investments 
B)  electronic investments and bonds 
C)  international investments and cash investments 
D)  electronic investments and bonds and international investments and cash investments 
A)  equity investments and property investments 
B)  electronic investments and bonds 
C)  international investments and cash investments 
D)  electronic investments and bonds and international investments and cash investments

Question 8

The method of accounting for a joint operation is commonly known as the line-by-line method.

Accepted Answer

A) True 
 B)False

Question 9

Examples of marketable securities are debentures,shares,options or bonds that can be readily sold at reasonably short notice.

Accepted Answer

A) True 
 B)False

Question 10

AASB 128 requires that where an investor company does significantly influence an investee:

Accepted Answer

A)  The investee company must revalue its assets to fair value and disclose all related party transactions. 
B)  The investor company must mark the shares to market. 
C)  The investee company must provide the investor company with details regarding profits made on inter-company transactions so that they may be eliminated from the group accounts. 
D)  The investor company must adopt the equity method of accounting for the investment. 
A)  The investee company must revalue its assets to fair value and disclose all related party transactions. 
B)  The investor company must mark the shares to market. 
C)  The investee company must provide the investor company with details regarding profits made on inter-company transactions so that they may be eliminated from the group accounts. 
D)  The investor company must adopt the equity method of accounting for the investment.

Question 11

A joint arrangement where assets and liabilities for the arrangement are held in a separate vehicle can be either a joint venture or a joint operation.

Accepted Answer

A) True 
 B)False

Question 12

Firms may make long-term investments in the equity instruments of other entities because:

Accepted Answer

A)  It may ultimately form the basis for a takeover bid. 
B)  Holding a diversified portfolio of shares can reduce the level of risk of the entity. 
C)  The investment is expected to yield a return in the form of capital gains and dividends. 
D)  All of the given answers are correct. 
A)  It may ultimately form the basis for a takeover bid. 
B)  Holding a diversified portfolio of shares can reduce the level of risk of the entity. 
C)  The investment is expected to yield a return in the form of capital gains and dividends. 
D)  All of the given answers are correct.

Question 13

Go Ltd,For Ltd and It Ltd contractually form a joint operation on 1 July 2013 to construct an oil well to extract oil that each of the joint operators will refine.The three companies agree to contribute the following amounts of capital to the venture in the same proportion as their rights to the assets and outputs: $$\begin{array} { | l | r | r | } 
\hline \text { Go Ltd } & \$ 25000000 & 50 \% \
\hline \text { For Ltd } & \$ 15000000 & 30 \% \
\hline \text { It Ltd } & \underline{\$ 10000000} & \underline { 20 \% } \
\hline &\underline{ \$ 50000000 }& \underline{100 \% }\
\hline
\end{array}$$ The funds are used on 1 July 2013 to purchase the land for $20 million and a rig and other equipment for $10 million.The balance of $20 million will be called on by the joint venture manager as required.For Ltd and It Ltd borrowed $5 million and $4 million respectively to finance their contributions to the joint venture.
The following information relates to the year ending 30 June 2014:
Total cost of production of $3 500 000.These costs have been deferred in order to amortise them as the production of oil commences.
Of the total costs of production all but $500 000 have been paid in cash.
The joint venture manager called on the joint operators to contribute a further $4 000 000 in total with each joint operator contributing the appropriate portion according to their share in the joint venture (provided above).
Assume that the necessary entries have been made to record the formation of the joint venture.What entries would be required to record the transactions for the year ended 30 June 2014?

Accepted Answer

A) 
  
B) 
  
C) 
  
D) 
  
A) 
  
B) 
  
C) 
  
D)

Question 14

A joint operation:

Accepted Answer

A)  is a jointly controlled entity set up as a partnership. 
B)  is a joint venture that is not yet functioning at its full capacity. 
C)  is a joint arrangement that has rights to the assets and obligations for the liabilities relating to the arrangement. 
D)  is a joint arrangement that does not has rights to the assets and obligations for the liabilities relating to the arrangement. 
A)  is a jointly controlled entity set up as a partnership. 
B)  is a joint venture that is not yet functioning at its full capacity. 
C)  is a joint arrangement that has rights to the assets and obligations for the liabilities relating to the arrangement. 
D)  is a joint arrangement that does not has rights to the assets and obligations for the liabilities relating to the arrangement.

Question 15

Bee Ltd acquired a 40 per cent interest in Bop Ltd on 1 July 2014 for a cash consideration of $772 000.Bop Ltd's equity at the time of purchase was as follows: $$\begin{array} { | l | r | } 
\hline \text { Share capital } & 1360000 \
\hline \text { Retained earnings } & \underline { 430000 } \
\hline \text { Total shareholders' funds } & \underline {1790000} \
\hline
\end{array}$$ Additional information:
On 1 July 2014 Bop's plant and equipment had a carrying value of $600 000 but a fair value of $650 000.The carrying value of land was $560 000 while the fair value was $600 000.The remaining expected useful life of the plant and equipment at 1 July 2014 was 8 years.Bop did not revalue either asset in its books.
For the period ending 30 June 2014 Bop Ltd recorded an after-tax profit of $470 000,out of which dividends of $60 000 were proposed in the 2014/2015 period and paid in the 2015/2016 period.
For the year ended 30 June 2016 Bop Ltd had an after-tax loss of $60 000.Bop Ltd proposed a dividend of $120 000,which has not been paid this period.
Also during the year ended 30 June 2016,Bop Ltd revalued the land to $610 000.
Bee Ltd accrues dividends of associates as revenue when they are proposed.The investment has been recorded in Bee Ltd's books in accordance with the cost method.What consolidation journal entries are required to apply the equity accounting method for the period ended 30 June 2016?

Accepted Answer

A) 
$$\begin{array} { | l | l | r | r | } 
\hline \mathrm { Dr } & \text { Investment in Bop Ltd } & 150750 & \
\hline \mathrm { Cr } & \text { Retained earnings, beginning } & & 150750 \
\hline & & & \
\hline \mathrm { Dr } & \text { Investment in Bop Ltd } & 32250 & \
\hline \mathrm { Cr } & \text { Share of associate's loss } & & 32250 \
\hline & & & \
\hline \mathrm { Dr } & \text { Dividend revenue } & 48000 & \
\hline \mathrm { Cr } & \text { Investment in Bop Ltd } & & 48000 \
\hline & & & \
\hline \mathrm { Dr } & \text { Investment in Bop Ltd } & 20000 & \
\hline \mathrm { Cr } & \text { Asset revaluation reserve } & & 20000 \
\hline
\end{array}$$ 
B) 
$\begin{array}{|c|l|r|r|}
\hline \mathrm{Dr} & \text { Investment in Bop Ltd } & 772000 & \
\hline \mathrm{Dr} & \text { Goodwill } & 56000 & \
\hline \mathrm{Cr} & \text { Share capital } & & 544000 \
\hline \mathrm{Cr} & \text { Retained earnings } & & 172000 \
\hline & & & \
\hline \mathrm{Dr} & \text { Depreciation expense } & 6250 & \
\hline \mathrm{Cr} & \begin{array}{l}
\text { Accumulated depreciation-plant and } \
\text { equipment }
\end{array} & & 6250\
\hline & & & \
\hline \mathrm{Dr} & \text { Dividend revenue } & 48000 & \
\hline \mathrm{Cr} & \text { Investment in Bop Ltd } & & 48000 \
\hline
\end{array}$ 
C) 
$$\begin{array} { | l | l | r | r | } 
\hline \mathrm { Dr } & \text { Investment in Bop Ltd } & 772000 & \
\hline \mathrm { Dr } & \text { Goodwill } & 20000 & \
\hline \mathrm { Cr } & \text { Asset revaluation reserve } & & 36000 \
\hline \mathrm { Cr } & \text { Share capital } & & 544000 \
\hline \mathrm { Cr } & \text { Retained earnings } & & 172000 \
\hline & & & \
\hline \mathrm { Dr } & \text { Dividend revenue } & 10000 & \
\hline \mathrm { Cr } & \text { Investment in Bop Ltd } & & 10000 \
\hline
\end{array}$$ 
D) 
$$\begin{array} { | l | l | r | r | } 
\hline \mathrm { Dr } & \text { Investment in Bop Ltd } & 155750 & \
\hline \mathrm { Cr } & \text { Retained earnings, beginning } & & 155750 \
\hline & & & \
\hline \mathrm { Dr } & \text { Share of associate's loss } & 32250 & \
\hline \mathrm { Cr } & \text { Investment in Bop Ltd } & & 32250 \
\hline & & & \
\hline \mathrm { Dr } & \text { Dividend revenue } & 48000 & \
\hline \mathrm { Cr } & \text { Investment in Bop Ltd } & & 48000 \
\hline & & & \
\hline \mathrm { Dr } & \text { Investment in Bop Ltd } & 4000 & \
\hline \mathrm { Cr } & \text { Asset revaluation reserve } & & 4000 \
\hline
\end{array}$$ 
A) 
$$\begin{array} { | l | l | r | r | } 
\hline \mathrm { Dr } & \text { Investment in Bop Ltd } & 150750 & \
\hline \mathrm { Cr } & \text { Retained earnings, beginning } & & 150750 \
\hline & & & \
\hline \mathrm { Dr } & \text { Investment in Bop Ltd } & 32250 & \
\hline \mathrm { Cr } & \text { Share of associate's loss } & & 32250 \
\hline & & & \
\hline \mathrm { Dr } & \text { Dividend revenue } & 48000 & \
\hline \mathrm { Cr } & \text { Investment in Bop Ltd } & & 48000 \
\hline & & & \
\hline \mathrm { Dr } & \text { Investment in Bop Ltd } & 20000 & \
\hline \mathrm { Cr } & \text { Asset revaluation reserve } & & 20000 \
\hline
\end{array}$$ 
B) 
$\begin{array}{|c|l|r|r|}
\hline \mathrm{Dr} & \text { Investment in Bop Ltd } & 772000 & \
\hline \mathrm{Dr} & \text { Goodwill } & 56000 & \
\hline \mathrm{Cr} & \text { Share capital } & & 544000 \
\hline \mathrm{Cr} & \text { Retained earnings } & & 172000 \
\hline & & & \
\hline \mathrm{Dr} & \text { Depreciation expense } & 6250 & \
\hline \mathrm{Cr} & \begin{array}{l}
\text { Accumulated depreciation-plant and } \
\text { equipment }
\end{array} & & 6250\
\hline & & & \
\hline \mathrm{Dr} & \text { Dividend revenue } & 48000 & \
\hline \mathrm{Cr} & \text { Investment in Bop Ltd } & & 48000 \
\hline
\end{array}$ 
C) 
$$\begin{array} { | l | l | r | r | } 
\hline \mathrm { Dr } & \text { Investment in Bop Ltd } & 772000 & \
\hline \mathrm { Dr } & \text { Goodwill } & 20000 & \
\hline \mathrm { Cr } & \text { Asset revaluation reserve } & & 36000 \
\hline \mathrm { Cr } & \text { Share capital } & & 544000 \
\hline \mathrm { Cr } & \text { Retained earnings } & & 172000 \
\hline & & & \
\hline \mathrm { Dr } & \text { Dividend revenue } & 10000 & \
\hline \mathrm { Cr } & \text { Investment in Bop Ltd } & & 10000 \
\hline
\end{array}$$ 
D) 
$$\begin{array} { | l | l | r | r | } 
\hline \mathrm { Dr } & \text { Investment in Bop Ltd } & 155750 & \
\hline \mathrm { Cr } & \text { Retained earnings, beginning } & & 155750 \
\hline & & & \
\hline \mathrm { Dr } & \text { Share of associate's loss } & 32250 & \
\hline \mathrm { Cr } & \text { Investment in Bop Ltd } & & 32250 \
\hline & & & \
\hline \mathrm { Dr } & \text { Dividend revenue } & 48000 & \
\hline \mathrm { Cr } & \text { Investment in Bop Ltd } & & 48000 \
\hline & & & \
\hline \mathrm { Dr } & \text { Investment in Bop Ltd } & 4000 & \
\hline \mathrm { Cr } & \text { Asset revaluation reserve } & & 4000 \
\hline
\end{array}$$

Question 16

Examples of bonds include:

Accepted Answer

A)  debentures. 
B)  options. 
C)  preference shares. 
D)  accounts payable. 
A)  debentures. 
B)  options. 
C)  preference shares. 
D)  accounts payable.

Question 17

Where a joint venturer prepares consolidated financial statements then the equity method will be used in the consolidated financial statements.

Accepted Answer

A) True 
 B)False

Question 18

Discuss how the carrying amount of an investment in an associate is determined as prescribed in with AASB 128 Investments in Associates and Joint Ventures.

Accepted Answer

AASB 128 provides guidance on how to det

Question 19

Discuss the accounting treatment for a joint operation as prescribed in AASB 11 Joint Arrangements.

Accepted Answer

AASB 11 Joint Arrangements provides guid

Question 20

An associate is an investee over which the investor has control.

Accepted Answer

A) True 
 B)False

Exam 31: Accounting for Equity Investments,including Investments in Associates and Joint Arrangements

Where a joint venture is a partnership:

The requirements of AASB 128 relating to the equity method of accounting for investments in associates include:

A joint arrangement that is not structured through a separate vehicle is called:

Explain the term 'significant influence',and how it is determined,including several factors that need to be considered when making such determination

Outline the arguments for and against the use of equity accounting,relative to cost method,when accounting for an investment.

Which of the following are categories that are commonly used to classify investments?

The method of accounting for a joint operation is commonly known as the line-by-line method.

Examples of marketable securities are debentures,shares,options or bonds that can be readily sold at reasonably short notice.

AASB 128 requires that where an investor company does significantly influence an investee:

A joint arrangement where assets and liabilities for the arrangement are held in a separate vehicle can be either a joint venture or a joint operation.

Firms may make long-term investments in the equity instruments of other entities because:

A joint operation:

Examples of bonds include:

Where a joint venturer prepares consolidated financial statements then the equity method will be used in the consolidated financial statements.

Discuss how the carrying amount of an investment in an associate is determined as prescribed in with AASB 128 Investments in Associates and Joint Ventures.

Discuss the accounting treatment for a joint operation as prescribed in AASB 11 Joint Arrangements.

An associate is an investee over which the investor has control.

An Overview of the Australian External Reporting Environment

The Conceptual Framework of Accounting and Its Relevance to Financial Reporting

Theories of Accounting

An Overview of Accounting for Assets

Depreciation of Property, plant and Equipment

Revaluations and Impairment Testing of Non-Current Assets

Inventory

Accounting for Intangibles

Accounting for Heritage Assets and Biological Assets

An Overview of Accounting for Liabilities

Accounting for Leases

Accounting for Employee Benefits

Share Capital and Reserves

Accounting for Financial Instruments

Revenue Recognition Issues

The Statement of Comprehensive Income and Statement of Changes in Equity

Accounting for Share-Based Payments

Accounting for Income Taxes

The Statement of Cash Flows

Accounting for the Extractive Industries

Accounting for General Insurance Contracts

Accounting for Superannuation Plans

Events Occurring After the End of the Reporting Period

Segment Reporting

Related Party Disclosures

Earnings Per Share

Accounting for Group Structures

Further Consolidation Issues I: Accounting for Intragroup Transactions

Further Consolidation Issues II: Accounting for Non-Controlling Interests

Further Consolidation Issues IV: Accounting for Changes in the Degree of Ownership of a Subsidiary

Accounting for Foreign Currency Transactions

Translating the Financial Statements of Foreign Operations

Accounting for Corporate Social Responsibility

Filters