Investment in Associate-Other Accounting Issues

Refers to a sales of assets from associate to the investor?

• Downstream transaction

• Upstream transaction

• Remeasurement

• None of the above

What is the treatment of downstream transaction?

• Eliminated

• accounted for as sale of assets

• same as upstream transaction

• accounted for as held for sale

In discontinuance of equity method, the investor may account for the investment as

• Financial Asset at fair value through profit or loss

• Financial Asset at fair value through other comprehensive income

• Investment in unquoted equity

• all of the above

Equity method is not applicable when

• the investor is wholly owned subsidiary

• the investor's debt and equity instruments are not traded in public market

• the investor file or in the process of filing financial statements with the SEC

• all of the above

Investment in less than 20% may account for

• Fair Value Method

• Cost Method

• Neither of the choices

• Either of the choices

The investment in associate achieved in stages is covered by

• PAS 28

• PFRS 3

• PAS 32

• PFRS 9

Under the Fair value approach, the total cost of investment for initial application of the equity method is the fair value of the existing interest acquired

• TRUE

• FALSE

Under fair value approach, the existing interest in the associate is remeasured at fair value with any changes in fair value included in the profit or loss

• TRUE

• FALSE

Under the fair value and cost method, the investor does share in the profit and loss of the investee because of the legal relationship between the investor and investee

• TRUE

• FALSE

Associate held for sale is accounted for under

• PAS 28

• PFRS 3

• PFRS 5

• PFRS 32