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OT Notes chapter 2, example 2, pg 17

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA SBR Exams › OT Notes chapter 2, example 2, pg 17

  • This topic has 1 reply, 2 voices, and was last updated 7 years ago by P2-D2.
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  • August 15, 2016 at 2:01 am #333181
    nari
    Member
    • Topics: 261
    • Replies: 176
    • ☆☆☆

    Hello

    I am confused by the fact that in the answer to this question (where it was Jonas and 5 friends), there is a line item for investment in associate while in the example right before (where it was Danute and 3 friends) its termed investment in joint venture. Please clarify.

    August 16, 2016 at 10:01 am #333470
    P2-D2
    Keymaster
    • Topics: 4
    • Replies: 6764
    • ☆☆☆☆☆

    Hi,

    It specifically says in the first example that it is a joint venture. In the second example there is no mention of a joint venture or that the decisions are made on agreement of all parties, so therefore we have to assume that we only have influence over the decision. If we only have influence then it is treated as an associate.

    Thanks

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