Question Chapter 12

An associate is an undertaking in which the investor has:

• Control that is only temporary

• Significant influence, and which is neither a subsidiary, nor a joint venture

• Control of financial decisions, but not operating decisions

• Control, but no board membership

In a jointly-controlled operation:

• All assets are pooled

• Ventures use their own assets and resources

• All assets must be leased

• Separate accounts are mandatory

jointly-controlled assets:

• Revenues and costs are shared according to the contract

• Ventures use their own assets and resources

• All assets must be leased

• All profits must be shared equally

jointly-controlled entities:

• All assets must be leased

• All profits must be shared equally

• A legal structure houses the joint venture

• No accounts are required

How Is goodwill arising on the acquisition of an associate reflected in the financial statements:

• Goodwill is amortized

• Goodwill*s impairment is tested individually

• Goodwill is written off against profit and loss

• Goodwill is not recognized separately and it included within the carrying amount of the investment