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Equity and Cost Method

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA FR Exams › Equity and Cost Method

  • This topic has 5 replies, 2 voices, and was last updated 9 years ago by AvatarMikeLittle.
Viewing 6 posts - 1 through 6 (of 6 total)
  • Author
    Posts
  • September 21, 2016 at 10:53 pm #341281
    Avatarcoop
    Participant
    • Topics: 29
    • Replies: 45
    • ☆☆

    Sir,
    I ask about, which method is used, equity or cost? for both the investment in subsidiary (consolidation) and associate (no consolidation) ?
    Thanks

    September 22, 2016 at 1:46 am #341287
    AvatarMikeLittle
    Keymaster
    • Topics: 27
    • Replies: 23368
    • ☆☆☆☆☆

    Cost for the Subsidiary and equity for the Associate

    Surely this is all in the course notes and in the videos

    September 22, 2016 at 5:54 pm #341397
    Avatarcoop
    Participant
    • Topics: 29
    • Replies: 45
    • ☆☆

    But is it possible to use any of both at the subsidiary case ? as long as there is consolidated statements .

    September 22, 2016 at 11:48 pm #341416
    AvatarMikeLittle
    Keymaster
    • Topics: 27
    • Replies: 23368
    • ☆☆☆☆☆

    NO!

    In the case of the subsidiary we HAVE to use the profits as at date of acquisition

    Is that ok for you?

    September 23, 2016 at 4:49 pm #341479
    Avatarcoop
    Participant
    • Topics: 29
    • Replies: 45
    • ☆☆

    It is meant that we have to use only the cost method, at the subsidiary case ?

    September 23, 2016 at 5:40 pm #341487
    AvatarMikeLittle
    Keymaster
    • Topics: 27
    • Replies: 23368
    • ☆☆☆☆☆

    Yes, IFRS 3 talks about an acquirer and an acquiree and cost method is the one to be applied

  • Author
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Viewing 6 posts - 1 through 6 (of 6 total)
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