If an Investment in an Associate Entity Were to Be

question 44

Multiple Choice

If an investment in an associate entity were to be accounted for using the cost method,the investment is initially recognised at its cost of acquisition and:

• A) All dividends declared in the post-acquisition period are treated as a recovery of the investment.
• B) If the shares in the associate are traded in an active market, market value increments or decrements are recognised as gains or losses at each reporting date.
• C) Dividends declared from pre-acquisition profits are deducted from the carrying amount of the investment, even if these dividends are declared subsequent to acquisition.
• D) None of the above.

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Definitions:

Regression Line

A statistical tool used to understand the relationship between independent and dependent variables, often represented as a straight line on scatter plots.

Job Evaluation Points

A quantitative method used in job evaluation to rate positions based on specific criteria such as skill, effort, and responsibility.

Market Line

A graphical representation depicting the compensation levels across different jobs, typically illustrating the relationship between the job's relative worth and the pay provided.

Job Evaluation Results

The outcomes derived from a systematic process of determining the relative worth of various jobs within an organization, often influencing compensation.