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.作者: atate2007 时间: 2013-4-11 20:37
In 2009 they have a joint venture, so under GAAP they have to use the equity method. It was a bit confusing.作者: jcfa2011 时间: 2013-4-11 20:42
Thanks. I thought about that. But it is certainly confusing. If a company owns a joint venture with another company, does it imply that it does not have control over the JV? In other words, is it prohibited from using the consolidation method?作者: dmrktrading 时间: 2013-4-11 20:46
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.
