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Investment in JV under Equity Method

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA SBR Exams › Investment in JV under Equity Method

  • This topic has 1 reply, 2 voices, and was last updated 4 years ago by Stephen Widberg.
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  • June 20, 2021 at 11:11 am #625907
    j050402112
    Participant
    • Topics: 1
    • Replies: 0
    • ☆

    Hi all,

    I have a regarding the inv. in JV under Equity Method: if the entity investing in the JV, besides the capital contribution, contributes as well with a loan, how we account for the principal and interests at the level of the investor?

    Shall we have in the BS the capital contribution + Principal? And in the P/L, shall we have the share of the investor into the JV P/L + interests?

    Thank you.

    KR,
    Jose

    June 20, 2021 at 1:07 pm #625922
    Stephen Widberg
    Keymaster
    • Topics: 16
    • Replies: 3432
    • ☆☆☆☆☆

    For exam purposes, if there was a loan to a JV, it will be a financial asset with interest income in the P&L. Nothing to cancel out.

    ANSWERS GIVEN ARE FOR EXAM PURPOSES. NO LIABILITY WILL BE ACCEPTED IN RESPECT OF ANSWERS GIVEN.

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