CAF-6 · Chapter 10 · Question 4 of 15
Under the 'Equity Method', the investment is initially recognized at:
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: B) Cost
Explanation
The investment in an associate is initially recognized at cost and the carrying amount is increased or decreased thereafter to recognize the investor's share of the profit or loss of the investee.
More Associates (IAS 28) MCQs
- Q6Which of the following is NOT an indicator of Significant Influence?
- Q7In the Consolidated Statement of Profit or Loss, the investor's share of the associate's profit is shown as:
- Q8If an investor's share of 'Losses' of an associate equals or exceeds its interest in the associate, the investor:
- Q9If an investor sells goods to its associate (downstream transaction) and some goods remain in the associate's inventory, the unrealized…
- Q10In the Statement of Financial Position, an investment in an associate is classified as a: