CFAI Sample Exam 2 Q17 question, solution, control

mkytz15

Is there a mistake in the answer to this question? The solution seems to assume that Cupernico would use the equity method in 2009. However, the vignette mentioned that Cupernico is considered to have control over the subsidiary. Furthermore, the answer to Q13 says that Cupernico used the consolidation method in 2008. Any help is appreciated. Thanks.

sameeragarwal

In 2009 they have a joint venture, so under GAAP they have to use the equity method. It was a bit confusing.

madaochenggong

If they clearly mention joint venture then we should assume it to have joint control and in such a case, under US GAAP, we should use Equity method.