Test bank and solution of advanced financial accounting 7e (2)
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Test bank and solution of advanced financial accounting 7e (2)
CHAPTER 2Intercorporate Equity Investments:An IntroductionThis chapter reviews the accounting for intercorporate investments. The discussion covers in Test bank and solution of advanced financial accounting 7e (2)nvestments such as passive investments; controlled entities such as subsidiaries and structured entities; associates and joint ventures; as well as the appropriate method of accounting for each. Private company reporting (i.e. accounting standards for private enterprises), as it applies to accountin Test bank and solution of advanced financial accounting 7e (2)g for investments, is also discussed. The chapter concentrates on investments that are controlled or subject to significant influence.The concepts ofTest bank and solution of advanced financial accounting 7e (2)
control and significant influence (both direct and indirect) are discussed from both a qualitative and a quantitative perspective. Simple examples of CHAPTER 2Intercorporate Equity Investments:An IntroductionThis chapter reviews the accounting for intercorporate investments. The discussion covers in Test bank and solution of advanced financial accounting 7e (2)and recording of intercorporate investments. Two approaches are used to illustrate the consolidation process: the direct and the worksheet approach. The usefulness and shortcomings of consolidation and equity reporting are discussed, as are the conditions under which nonconsolidated statements may b Test bank and solution of advanced financial accounting 7e (2)e useful.SUMMARY OF ASSIGNMENT MATERIALCase 2-1: Multi-CorporationTwo short examples of investments are described. The student must determine the apprTest bank and solution of advanced financial accounting 7e (2)
opriate method of accounting for these investments.Case 2-2: Salieri Ltd.An investor corporation has varying ownership interests in several other compCHAPTER 2Intercorporate Equity Investments:An IntroductionThis chapter reviews the accounting for intercorporate investments. The discussion covers in Test bank and solution of advanced financial accounting 7e (2) also which subsidiaries should be consolidated. This case is useful for reviewing the substance of significant influence and for reviewing the criteria for consolidation as described in IFRS 10 Consolidated Financial Statements.Case 2-3: Heavenly Hakka. Nature’s Harvest. and CostalThree independent Test bank and solution of advanced financial accounting 7e (2) investment scenarios are provided. Students are required to first discuss the various reporting alternatives available to account for each investmentTest bank and solution of advanced financial accounting 7e (2)
scenario and then decide on the appropriate method of accounting for that scenario. Students will need to refer to relevant international standards fCHAPTER 2Intercorporate Equity Investments:An IntroductionThis chapter reviews the accounting for intercorporate investments. The discussion covers in Test bank and solution of advanced financial accounting 7e (2)fe InvestmentsThis is a single issue case focussing on whether reputational risk by itself requires consolidation. During the 2007-2009 financial crisis many financial institutions decided to provide support to and consolidated structured entities whose demise posed significant reputational risk to Test bank and solution of advanced financial accounting 7e (2)the institutions. The institutions however had no legal or contractual obligation towards the structured entities. Consequently, the IASB considered wTest bank and solution of advanced financial accounting 7e (2)
hether reputational risk by itself warranted consolidation. Eventually, the IASB decided not to mention reputational risk in ED 10 or in the ensuing ICHAPTER 2Intercorporate Equity Investments:An IntroductionThis chapter reviews the accounting for intercorporate investments. The discussion covers in Test bank and solution of advanced financial accounting 7e (2)ch should be considered for deciding whether one entity is exposed to risks and rewards arising from another entity and whether the former controlled and had power over the latter and thus should be required to consolidate the latter.Case 2-5: Eany, Meeny, Miny and Moe: and l ick. Tack, and ToeThe t Test bank and solution of advanced financial accounting 7e (2)wo situations in this case both focus on whether the arrangement between investors constitutes a joint arrangement under IFRS 11. wherein some or allTest bank and solution of advanced financial accounting 7e (2)
of the parties concerned possess joint control over the investee. Students are required to decide on the reporting choice investors have to follow to CHAPTER 2Intercorporate Equity Investments:An IntroductionThis chapter reviews the accounting for intercorporate investments. The discussion covers in Test bank and solution of advanced financial accounting 7e (2)entral issue in this case where the new investor has purchased all the Class A voting shares but the Class B voting shares are held by another party. The shareholder’s agreement is also relevant.Case 2-7: Jackson Capital Ltd.This is a multi-competency case with coverage of both accounting and assura Test bank and solution of advanced financial accounting 7e (2)nce issues. The majority of the issues in the case relate to the appropriate accounting method for a series of investments. If desired, the instructorTest bank and solution of advanced financial accounting 7e (2)
could request that the students focus on the accounting issues only.P2-1 (15 minutes, easy)An investment scenario is provided and students are asked CHAPTER 2Intercorporate Equity Investments:An IntroductionThis chapter reviews the accounting for intercorporate investments. The discussion covers in Test bank and solution of advanced financial accounting 7e (2), with explanations.P2-2 (20 minutes, easy)A simple problem that requires students to determine the income gains and losses an investor has to report for two consecutive years in relation to an investment under the (1) cost and (2) equity methods respectively and alternatively if the investment were Test bank and solution of advanced financial accounting 7e (2) classified as a (3) FVTPL and (4) FVTOCI investment respectively. The problem alsoCopyright ©2014 Pearson Canada Inc.26Chapter 2 - Intercorporate EquTest bank and solution of advanced financial accounting 7e (2)
ity Investments: An Introductionrequires students to calculate the balance of the investment under each of these alternate reporting methods.P2-3 (12 CHAPTER 2Intercorporate Equity Investments:An IntroductionThis chapter reviews the accounting for intercorporate investments. The discussion covers in Test bank and solution of advanced financial accounting 7e (2)cessary for going from the cost method of recording to the equity method of reporting.P2-4 (25 minutes, medium)For the given investment scenario students are first asked to assume that it is a FVTPT. and alternatively as a FVTOC1 investment and arc required to i) provide the journal entries required Test bank and solution of advanced financial accounting 7e (2) in relation to the investment, and ii) balance in the investment account. Next the students are asked to assume that at year-end the investor decidedTest bank and solution of advanced financial accounting 7e (2)
to change the method of record to the equity method and wants to report under the method as well and arc required to provide the necessary adjusting CHAPTER 2Intercorporate Equity Investments:An IntroductionThis chapter reviews the accounting for intercorporate investments. The discussion covers in Test bank and solution of advanced financial accounting 7e (2)alue through other comprehensive income investment students are asked to provide i) the dividend income and unrealized gains losses recognized by the investor and ii) the balance in the carrying value of the investment, over a four-year period. Test bank and solution of advanced financial accounting 7e (2)CHAPTER 2Intercorporate Equity Investments:An IntroductionThis chapter reviews the accounting for intercorporate investments. The discussion covers inGọi ngay
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