CAF-6 · Chapter 10 · Question 13 of 15
If an investment in an associate becomes a subsidiary (investor obtains control), the equity method is:
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: B) Discontinued and the acquisition method is applied.
Explanation
Once control is obtained, IFRS 10 and IFRS 3 take over and the equity method is no longer applicable.
More Associates (IAS 28) MCQs
- Q15The entire carrying amount of an investment in an associate is tested for 'Impairment' as a single asset if:
- Q1An 'Associate' is an entity over which the investor has:
- Q2Significant influence is generally presumed to exist if the investor holds, directly or indirectly, what percentage of the voting power of…
- Q3Which accounting method is used to account for investments in associates in consolidated financial statements?
- Q4Under the 'Equity Method', the investment is initially recognized at: