SS5 FRA 2 - Reading 16 Intercorp

Question 1

Define % ownership for financial assets

Answer 1

ownership interest of 20% or less and is considered passive. “investor cannot significantly influence or control investee”

Question 2

Define % ownership for investment in associates

Answer 2

interest ownership btwn 20-50% and is considered non-controlling. Investor can have significant influence on investee business operations.

Question 3

Equity or acquisition method used for investment in associates?

Answer 3

equity method

Question 4

Define % ownership for business combinations

Answer 4

50% or more and is considered controlling.

Question 5

Equity or acquisition method used for business combinations?

Answer 5

acquisition method is used

Question 6

if % owned is less than 50% but are controlling interest, is it considered investment in associate or business combination?

Answer 6

business combination

Question 7

Equity or acquisition method used for joint ventures? same or different for IFRS v GAAP

Answer 7

equity method for both IFRS and GAAP