FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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Question
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
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Step 1
When the company has significant influence over the associate, then equity method should be used for accounting.
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- What is the default classification for an equity investment? A Fair value through profit or loss B Fair value through other comprehensive income C Amortised cost D Net proceedsarrow_forwardchoose from the following accounts: Accumulated Other Comprehensive Income Allowance for Investment Impairment Bond Investment at Amortized Cost Cash Commission Expense Dividends Receivable Dividend Revenue FV-NI Investments FV-OC|Investments Gain on Disposal of Investments - FV-NI Gain on Disposal of Investments - FV-OCI Gain on Sale of Investments GST Receivable Interest Expense Interest Income Interest Payable Interest Receivable Investment in Associate Investment Income or Loss Loss on Discontinued Operations Loss on Disposal of Investments FV-NI Loss on Disposal of Investments FV-OCI Loss on Impairment Loss on Sale of Investments No Entry Note Investment at Amortized Cost Other Investments Recovery of Loss from Impairment Retained Earnings Unrealized Gain or Loss Unrealized Gain or Loss - OCIarrow_forwardAssets do not include: Multiple Choice O O investments. accounts receivable. property, plant, and equipment. contributed capital.arrow_forward
- choose from the following accounts: Accumulated Other Comprehensive Income Allowance for Investment Impairment Bond Investment at Amortized Cost Cash Commission Expense Dividends Receivable Dividend Revenue FV-NI Investments FV-OC|Investments Gain on Disposal of Investments - FV-NI Gain on Disposal of Investments - FV-OCI Gain on Sale of Investments GST Receivable Interest Expense Interest Income Interest Payable Interest Receivable Investment in Associate Investment Income or Loss Loss on Discontinued Operations Loss on Disposal of Investments FV-NI Loss on Disposal of Investments FV-OCI Loss on Impairment Loss on Sale of Investments No Entry Note Investment at Amortized Cost Other Investments Recovery of Loss from Impairment Retained Earnings Unrealized Gain or Loss Unrealized Gain or Loss - OCIarrow_forwardWhat factors should be considered in determining the issue price of a debenture. and Provide some examples of items that would be adjusted directly against equity, rather than beingincluded as part of profit or loss.arrow_forward25. A parent company’s investment account would include an element which is representative of : Multiple Choice the unrecorded difference between fair value and book value of the investee’s assets. the unrecorded book value of the investor’s assets. the goodwill accrued since the purchase of the investee. the recorded current value of the investee’s assets.arrow_forward
- Demonstrate how to identify and account for equity investments classified forreporting purposes as fair value through net incomearrow_forwardEquity 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?arrow_forwardshow you work which of the following is not correct in regard to trading investments? a. They are held with the intention of selling them in a short period of time. b. Unrealized holding gains and losses are reported as part of net income. c. Any discount or premium is nott amortized d. All of these answer choices are correct.arrow_forward
- What is the fair-value option for reporting equity method investments? How do the equity method and fair-value accounting differ in recognizing income from an investee?arrow_forwardDescribe the Impairment of Equity Method Investments.arrow_forwardAccording to PAS 28, investments in associates are accounted for at fair value. using the equity method. using the asset method. at cost.arrow_forward
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