Module 8.8: Joint Ventures

Question 1

Joint venture

Answer 1

an entity in which control is shared by two or more investors

Question 2

Accounting for Joint Ventures

Answer 2

Both U.S. GAAP and IFRS require the equity method of accounting for joint ventures.

Question 3

Joint ventures are often used to

Answer 3

invest in foreign markets, special projects, or risky ventures.

Question 4

the proportionate consolidation method

Answer 4

For JV, In rare circumstances, the proportionate consolidation method may be allowed under U.S. GAAP and IFRS

Question 5

proportionate consolidation method

Answer 5

except the investor (venturer) only reports the proportionate share of the assets, liabilities, revenues, and expenses of the joint venture