54 which of the following standards prescribes the

54. Which of the following standards prescribes the disclosures
relating to investments in associates, joint ventures, and
subsidiaries?
a. PAS 27, Separate Financial Statements
b. PAS 28, Investments in Associates and Joint Ventures
c. PFRS 10, Consolidated Financial Statements
d. PFRS 12, Disclosure of Interests in Other Entities
55. A company has a 22% investment in another company that
it accounts for using the equity method. Which of the
following disclosures should be included in the company’s
annual financial statements?
b. The reason for the company’s decision to invest in the
investee company.
c. The company’s accounting policy for the investment.
d. Whether the investee company is involved in any
litigation.
Separate Financial Statements of the Investor [LO 8]
56. For the purposes of PAS 28, when an entity prepares
separate financial statements, it shall not account for its
investments in associates using
PRACTICE EXAM
1. The existence and effect of potential voting rights that are
currently exercisable or convertible are considered when
assessing whether an entity has significant influence. In
assessing whether potential voting rights contribute to
significant influence, the entity examines all facts and
circumstances that affect potential rights, including
a. The terms of exercise of the potential voting rights and
any other contractual arrangements.
b. The intentions of management.
c. The financial ability to exercise or convert those
potential rights.
d. All of the above.
2. Which of the following is incorrect under the equity
method?