CFAI L2 2011 Mock Afternoon Q37 Why consolidation method? 2011, companies, company, instead

hariRaj

So the company is owned by 3 companies, which in my understanding should be a joint venture. Shall we use proportionate instead of consolidation method?

JonnyKay

on to the next test

amqata

so joint venture can have

tarunajwani

Joint control is usually a 50%/50% split between 2 companies.  However, this control could be shared equally 1/3 between 3 investors, 1/4 between 4 investors etc

towardsutopia21

I see. thanks!!

hardwork24

no, in a joint venture you have JOINT CONTROL
consolidation = acquisition method.
since Cupercino has CONTROL, not JOINT CONTROL , you use Ac. Method.
the other are equity since they do not have joint control or control. anyway since it’s a US GAAP probleme even if they had JOINT control they would have been consolidated with Equity method

evolsteevol

btw, what does consolidation method mean? It seems to be acquisition method according to the answer