Respond that the following statement is true or false:

1. US GAAP does not specifically address the accounting for joint operations. Is this statement true or false?

2. Where a joint operator has rights to a specified percentage of all assets and obligations for a specified percentage of all liabilities, there would likely be no difference between proportionate consolidation and accounting for a joint operation. Is this statement true or false?

3. If a parent and its consolidated subsidiary have different accounting policies, US GAAP requires top-side adjustments in the consolidation to conform the subsidiary’s accounting policies to those of its parent. Is this statement true or false?

4. The IFRS guidance on joint arrangements applies to arrangements even if the contractual arrangement does not give all the parties collective control of the arrangement. Is this statement true or false?

Multiple choice questions:

5. Even when consolidation criteria are met under IFRS, there may be limited circumstances when a parent does not have to present consolidated financial statements. Select the most appropriate circumstances for non-consolidation.

a. Shareholders of the reporting company do not object.

b. No debt or equity instruments are traded in public markets, or are not in the process of being registered as public debt or equity.

c. The immediate or ultimate parent must prepare and publish consolidated IFRS financial statements.

d. Both a. and b.

e. Both a. and c.

f. Both b. and c.

g. a., b. and c

6. A jointly owned oil pipeline in which each owner bears its share of operating the pipeline best describes the following type of joint arrangement under IFRS:

a. Joint investment

b. Joint operation

c. Joint venture

d. None of the above

Answer rating: 100% (QA)

1 False 2 Fal... View the full answer