Discuss the Disclosure Requirements for Long Term Investments Including Accounting

question 15

Essay

Discuss the disclosure requirements for long term investments including accounting policies and non-controlling interest (NCI).
Companies should disclose their policies with regard to long-term investments. The general presumptions regarding the factors that establish a control investment and noted that these presumptions could be overcome in certain situations.
IFRS 3 Business Combinations requires that a reporting entity describe the basis for its assessment and any significant assumptions or judgments when the reporting entity has concluded that:

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Definitions:

Debt-Equity Ratio

The measure of a company's financial leverage, calculated by dividing its total liabilities by stockholders' equity.

Net Income

The overall earnings of a business following the deduction of all costs, taxes, and expenses from its gross revenue.

Sustainable Growth Rate

The maximum rate at which a company can grow its revenues and earnings without having to increase leverage or equity financing.

Equity Multiplier

A financial leverage ratio that measures the portion of a company’s assets that are financed by shareholders' equity.