Exam 6: Accounting for Investments in Associates and Joint Ventures

If an associate or joint venture has outstanding cumulative preference shares that are held by parties other than the entity and classified as ____________, the entity computes its share of profits or losses after adjusting for the dividends on such shares, whether or not the dividends have been declared.

The maximum difference between the ends of the reporting periods of the entity and the associate or joint venture can be no more than:

Queen Ltd. reports its investment in Kramer Co. on an equity basis. During the year, Queen received $15,000 in dividends from Kramer. How should Queen report these dividends?

If an associate or joint venture uses accounting policies other than those of the entity for like transactions and events in similar circumstances, adjustments shall be made to conform the _______________ accounting policies to those of the ______________ when the associate or joint venture's financial statements are used by the entity in applying the equity method.

What are the principles for adjusting for the effects of intercompany transactions under IAS 28?

If, after reporting losses, a joint venture earns a profit, the entity does not recognize a share of profits.

An investment in an associate is reported using the equity method from the date on which it becomes an associate.

The entity's share of current period profit of the associate or joint venture is disclosed as a separate line item in the entity's __________________

The purpose of the acquisition analysis relating to goodwill and fair value adjustments is to determine the real post-acquisition equity of the ____________________.

Where the associate or joint venture incurs losses, the carrying amount of the Investment in Associate or Joint Venture is first reduced to zero.

An investment in an associate or joint venture is reported using the _____________ method from the date on which it becomes an associate or joint venture.

Adjustments to the entity's share of the equity of the associate or joint venture are not made to accounts such as retained earnings as would occur under the consolidation method.

Unlike consolidation, there is no need to adjust for all transactions between the entity and the associate or joint venture; only the transactions where profit is affected require adjustment.

Describe how to account for losses incurred by associate and joint venturers.

The adjustment to recognize an entity's share of the asset revaluation reserve relating to an associate based on the on application of the equity method involves a debit to

The difference between the fair value and the ___________ value of the investment at the day of a second acquisition of the same shares, is a gain or loss through the profit and loss of the entity.

An investment in an associate or joint venture is accounted for using the equity method from the date on which it becomes an associate or joint venture. On acquisition of the investment, how is any difference between the cost of the investment and the entity's share of the net fair value of the investee's identifiable assets and liabilities accounted for?

Describe how dividends from a subsidiary, associate and joint venture are accounted for by a parent (entity).

Sales of assets from the entity to its associate or its joint venture is an example of a(n)______________________ transaction.

Sales or contributions of assets from an associate or joint venture to the investor is an example of a(n)_________________ transaction.