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Which statements is true regarding the equity method

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Reference no: EM132827969

Problem 1: Which consolidation method should be used in preparing consolidated financial statements in accordance with IFRS?

A. Proportionate consolidation method.

B. Either identifiable net assets or fair value enterprise method.

C. New entity method.

D. Parent company method.

Problem 2: A significant influence investment is one that:

A. allows the investor to exercise significant influence over only the operating policies of the Associate.

B. allows the investor to exercise significant influence over only the financing policies of the Associate.

C. allows the investor to exercise significant influence over the strategic, operating, and financing policies of the Associate.

D. allows the investor to exercise significant influence over the strategic and operating policies of the Associate.

Problem 3: Which of the following statements is TRUE regarding the equity method?

A. The equity method is used for reporting gains or losses for non-strategic investments.

B. The investor's share of the associate's dividends declared is reported as revenue.

C. The investor's investment in the associate changes in direct relation to the changes taking place in the associate's equity accounts.

Reference no: EM132827969

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