Day 12 - 76% Flashcards
1
Q
If a company owns 25% of another company but does not have the ability to exercise significant influence, the 1st should use the _____ method of FS reporting.
A
Fair value method
Equity method = needs significant influence and 20-50%
MCQ-07499
2
Q
Under the fair value method, how does the investor report investee net income and dividends received?
A
Net Income of investee is not reported
Dividends is reported as investment income
Note: these do not affect the carrying value of the investment since it is reported at FMV
MCQ-07457
3
Q
When is a footnote disclosure required for a contingent loss?
A
“Reasonably Possible”
MCQ-00916
4
Q
Can interest be capitalized if a company is experiencing delays in obtaining permits for a building construction?
A
Yes
MCQ-01540
