Asked by Jordan Tongen on Jun 08, 2024
Verified
Investments in associates (other than those classified as held for sale)will be measured at cost in the consolidated financial statements.
Investments In Associates
Investments where the investor has significant influence (typically 20-50% ownership) over the investee but does not control it.
Measured At Cost
An accounting principle where an asset is recorded on the balance sheet based on its original purchase price, including all costs necessary to get it ready for its intended use.
Consolidated Financial Statements
Financial statements of a group in which the assets, liabilities, equity, income, expenses, and cash flows of the parent company and its subsidiaries are presented as those of a single economic entity.
- Distinguish the kinds of entities eligible for subsidiary status and the range of equity security investments following pertinent accounting regulations.
Verified Answer
LM
Lauryn MerrillJun 15, 2024
Final Answer :
False
Explanation :
Investments in associates are initially recognized at cost in the consolidated financial statements, but subsequently they are measured using the equity method or fair value method depending on the level of influence and control over the associate.
Learning Objectives
- Distinguish the kinds of entities eligible for subsidiary status and the range of equity security investments following pertinent accounting regulations.