30% interest, no significant influence... assets, interest, ordinary, standard

IAmNeil

Anything out of the ordinary, or just standard rules that apply to financial assets being held to mty, trading, sale?

Kapie

Use standard rules for investment in financial assets. I guess u got this one from the mock. In the question, it should be classified as available for sale.

yalo

Yep Equity Method all day.

19831985

There would have to be some indication of control for it to be considered JV.

Newhuman

And if there's no description as to the degree of influence...are you still assuming eqy method?

neil1234

Regarding Joint Ventures:

Does the question have to specifically state that the investment is a joint venture? I've been burned on questions before where the question said that "Company X acquired 50% of Company A". Following IFRS I naturally assumed Proportionate Consolidation.

I would think that we have to be explicitly told it's a joint venture right?

sameeragarwal

They have to provide you with some type of description of the degree of influence. The question may not explicitly say that the company has influence, but it may mention board presence, contractual business relationships, technology arrangements, etc... and then you'll have to go from there.

If all else fails, I am going with common sense that 30% does indeed indicate significant influence.

OmarAdnan

Yeap, if they say 30% and can't determine significant influence, investment in securities, despite what may be practical real world sense.

ap0258

Not to back up a 30% case. I was assuming the OP was just throwing a random number out there. I would have to believe that they would make it clear on the test as to whether or not the firm has control over the investment. In the real world you are likely right, but for the next 5 days I'm not living in the real world.

ayodayo

@OnToTheNextOne any chance you can provide a reference :S