WorksheetsINVESTMENT IN ASSOCIATES & JOINT ARRANGEMENTS
Total questions: 7
Worksheet time: 4mins
What is the primary accounting method for investments in associates and joint venture?
Cost method
Fair value method
Equity method
Consolidation method
When using the equity method for investments in associates, how are dividends received from the associate recorded?
As an increase in the investment's carrying amount
As a reduction in the associate's share of profits
As an asset to the investment in associates
As an expense in the carrying amount
On 1 January 2022, AM Bhd acquired 30% ordinary shares (issued at RM1 each) of KL Bhd at a cost of RM54 million. On that date the retained profit of KL Bhd was RM126 million. The retained profit of KL Bhd at 31 December 2022 was RM158 million. At the end of the year, the impairment loss of goodwill of KL Bhd was RM5 million.
RM81 million
RM58.6 million
RM63.6 million
RM96.4 million
In a joint arrangement, what is the primary feature that distinguishes it from other types of business structures?
Shared profits and losses
Independent financial statements
Sole ownership
Shared control and decision-making
Orchid Bhd acquired 2 million ordinary shares of Lily Bhd. The number of issued
ordinary shares of Lily Bhd is 6 million shares. Orchid Bhd has the ability to appoint
two directors out of five directors in Lily Bhd. Identify the relationship between Orchid Bhd and Lily Bhd.
Parent and subsidiary
Joint arrangements
Associates
Joint venture
Harry Bhd, Omega Bhd, Toren Bhd decided to form a company known as Cool Bhd.
Harry Bhd, Omega Bhd, and Toren Bhd hold 25%,35% and 40% respectively of the
voting power in Cool Bhd. The contractual agreement among the investors is that at
least 90% of the voting right were required to execute decisions about relevant
activities of Cool Bhd. Which statement is TRUE regarding the above situation?
Cool Bhd is an associate of Toren Bhd
Harry Bhd and Omega Bhd have joint control over Cool Bhd. Toren Bhd is just a party to the arrangement.
Harry Bhd, Omega Bhd and Toren Bhd have joint control over Cool Bhd.
Cool Bhd is a subsidiary of Omega Bhd and Toren Bhd.
Company A and Company B have entered into a joint arrangement to explore and extract oil from a specific oilfield. Both companies share the control and decision-making in the arrangement. The arrangement also stated that all rights to the assets and obligations of the liability are to be shared equally. What type of joint arrangement is this?
Joint operation
Joint venture
Joint control
Joint associates
