Deck 29: Accounting for Associates, joint Arrangements and Related Party Disclosures

Question 1

Which of these definitions is NOT correct?

A)SIGNIFICANT INFLUENCE: the power to participate in the financial and operating policy decisions of the investee,but without control or joint control.
B)ASSOCIATE: an entity which is not a subsidiary or joint venture of the investor,but where they hold significant influence has significant influence.
C)EQUITY METHOD OF ACCOUNTING: the investors share of the profit and loss of investee is not included.
D)EQUITY METHOD OF ACCOUNTING: investments initially recognized at cost,and adjusted thereafter for post- acquisition changes in the investors share

Answer 1

C

Question 2

Which of these investments in X would NOT be exempt from the equity method?

A)An investment held by AZ,a wholly owned subsidy of Z,who do not trade debt or equity instruments in a public market,do not file investments with a securities commission and Z provides consolidated financial statements available for public use which comply with IFRS.Z has consented to AZ not using the equity method
B)An investment held by Y,held for sale in accordance with IFRS 5
C)An investment held by F,a venture capital organisation
D)An investment held by GG,a wholly owned subsidy of Z,who do not trade debt or equity instruments in a public market,do not file investments with a securities commission and Z provides consolidated financial statements available for public use which comply with IFRS.Z has not been consulted regarding AZ's use of the equity method

Answer 2

D

Question 3

IFRS define a joint venture as an arrangement where entities with joint control have rights to the assets and obligations for the liabilities

Answer 3

False

Question 4

Accounting for joint operations and joint ventures uses the same methods

Question 5

IASB replaced IAS31 with IAS 28

Question 6

IFRS 11 does not include any disclosure requirements for joint ventures

Question 7

IAS 28 defines an associate as an entity in which the investor has significant influence,and that is neither a subsidiary nor an interest in a joint venture.

Question 8

Under IAS 24,which of these would not be a related party to entity AX?

A)BX,an entity also in the X group
B)Y,an entity controlled by the spouse of a key manager of AX
C)CAS,an entity located close to AX
D)AZ,an entity which,like AX,is a joint venture of A group

Question 9

Which of these definitions is NOT correct?

A)JOINT CONTROL: contractually agreed sharing of an arrangement when decisions about related activities are made
B)JOINT OPERATION: where parties with joint control have access to net assets of the arrangement
C)JOINT ARRANGEMENT: an arrangement shared dependent on a contractual agreement,and establishing joint control
D)JOINT VENTURE: where parties with joint control have right to the net assets of the arrangement

Question 10

Which of these is NOT true about transactions between a venturer and the joint venture?

A)It is dealt with by IAS 28
B)Assets transferred from the joint venture to the venturer recognize all gain and loss
C)Assets transferred from the venture to the joint venture recognize only the gain and loss attributable to the interests of other investors
D)The equity method is used