Equity method sparks curiosity

What does the equity method include in the financial statements?

The acquired percentage of assets, liabilities, income and expenses of the acquired entity

One line in the statement of financial position and statement of profit or loss

Holding the investment at fair value through profit or loss

100% of the assets, liabilities, income and expenses of the acquired entity

How should contingent consideration be included on acquisition?

At fair value

Only include if probable that it will be paid

Disclosed but not included

At present value

Which, if any, of the following statements are true? Statement 1, the equity method is applied to accounting for associates, or Statement 2, the equity method is applied to accounting for joint ventures

Both statements

Neither statement

Statement 1 only

Statement 2 only

What is the proposed treatment for transactions with an associate?

Hold any gain or loss in a reserve until full disposal by the associate

Full gain or loss recognised

No gain or loss recognised

Limit the gain or loss recognised to the share of the unowned part of the associate

An entity should account for an investment as an associate with what level of power?

Significant influence

Joint control

No influence

Control

What standard is the exposure draft looking to adjust?

IAS 11

IAS 27

IAS 28

None of the above

Where will share of profit or loss of the associate be shown in the statement of profit or loss under IFRS 18?

In the investing category

In revenue

In the operating category

In the financing category

Which of these statements is true regarding the proposals to cost? Statement 1, Contingent consideration should be included at fair value, or Statement 2, Any previously held equity is remeasured to fair value

Both statements are true

Statement 2 only is true

Statement 1 only is true

Neither statement is true

When does the comment period for the Exposure draft end?

31 December 2024

31 August 2025

20 March 2025

25 January 2025

Which, if any, of the following statements is correct? Statement 1, The equity method can be used for subsidiaries in a company's individual financial statements, or Statement 2, The exposure draft seeks to clarify what is meant by significant influence

Statement 2 only is correct

Statement 1 only is correct

Both statements are correct

Neither statement is correct

Equity method sparks curiosity

What does the equity method include in the financial statements?

How should contingent consideration be included on acquisition?

Which, if any, of the following statements are true? Statement 1, the equity method is applied to accounting for associates, or Statement 2, the equity method is applied to accounting for joint ventures

What is the proposed treatment for transactions with an associate?

An entity should account for an investment as an associate with what level of power?

What standard is the exposure draft looking to adjust?

Where will share of profit or loss of the associate be shown in the statement of profit or loss under IFRS 18?

Which of these statements is true regarding the proposals to cost? Statement 1, Contingent consideration should be included at fair value, or Statement 2, Any previously held equity is remeasured to fair value

When does the comment period for the Exposure draft end?

Which, if any, of the following statements is correct? Statement 1, The equity method can be used for subsidiaries in a company's individual financial statements, or Statement 2, The exposure draft seeks to clarify what is meant by significant influence

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