If an Entity Had Previously Held an Investment in Another

question 19

Essay

If an entity had previously held an investment in another entity and by a further investment that investee became an associate or joint venture of the entity, what must be recorded at the date of the second investment?

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Definitions:

Operating Cash Flow

Cash generated from a company's normal business operations.

Net Capital Spending

The total expenditure on fixed assets less any sales of fixed assets. It indicates how much a company is investing in its current and future operations.

Dividends Per Share

The total dividends declared in a year divided by the number of outstanding shares of the company’s stock.

Par Value

The nominal or face value of a bond, share, or other financial instrument, traditionally the amount for which the security is issued.