1.Under IFRS 9, IFRS companies can choose from which of the following options for reporting their investments in debt securities, depending on investment objectives?

A. Amortized cost or FV-OCI

B. FV-NI, FV-OCI, or amortized cost

C. Amortized cost or FV-NI

D. FV-NI or FV-OCI

 

2.Which statement is true regarding U.S. GAAP and IFRS for joint ventures?

A. Both U.S. GAAP and IFRS require consolidation of joint ventures.

B. U.S. GAAP reports joint ventures using the equity method, and IFRS requires consolidation of joint ventures.

C. U.S. GAAP requires consolidation of joint ventures while IFRS requires the equity method.

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

 

3.A parent uses the cost method to report its investment in a wholly-owned subsidiary, acquired on January 1, 2019. If it had used the complete equity method, the parent would have reported 2019 equity in net income of $500,000 and 2020 equity in net income of $550,000. The subsidiary’s 2019 and 2020 dividends were $100,000 and $120,000, respectively. The subsidiary does not report any other comprehensive income. On the 2020 consolidation working paper, an adjusting entry is necessary to increase the parent’s beginning retained earnings balance by

A.$ 400,000

B.$ 500,000

C.$ 830,000

D.$1,050,000

Answer rating: 100% (QA)

1 B FVNI FVOCI or amortized cost Under IFRS 9 the instrume... View the full answer