CAF-6 · Chapter 10 · Question 12 of 15
Which of the following is NOT required for the application of the equity method?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: C) The investor must own at least 51% of the associate.
Explanation
51% ownership would imply control, making the entity a subsidiary, not an associate.
More Associates (IAS 28) MCQs
- Q14How is 'Goodwill' related to an associate handled in the financial statements?
- 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?