CA Inter P1 · Chapter 8 · Question 9 of 10
Under AS 27, an interest in a jointly controlled entity is reported in the venturer's consolidated financial statements using:
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: B) Proportionate consolidation
Explanation
AS 27 requires a venturer to report its interest in a jointly controlled entity in its consolidated financial statements using proportionate consolidation, combining its share of each of the assets, liabilities, income and expenses of the jointly controlled entity with similar items. The equity method is used for associates under AS 23.
More Accounting Standards for Consolidated Financial Statements MCQs
- Q1Under AS 21, control of an enterprise exists when the parent:
- Q2Case: Hiranya Ltd acquired 80% of the equity shares of Sona Ltd for ₹13,00,000. On that date Sona Ltd had share capital of ₹10,00,000 and…
- Q3Case: Hiranya Ltd holds 80% of Sona Ltd. At the consolidated balance sheet date, Sona Ltd has share capital of ₹10,00,000 and total…
- Q4Case: Jaldhara Ltd (the parent) sells goods to its 80% subsidiary at cost plus 25%. At the year end the subsidiary holds such goods…
- Q5Case: Bhavya Ltd acquired 60% of Ketaki Ltd on 1 April for ₹9,00,000. In June, Ketaki Ltd paid a dividend of ₹1,00,000 entirely out of…