In the Textbook It Is Suggested That a Share Buybacks

question 6

Multiple Choice

In the textbook it is suggested that a share buybacks can be characterised in two ways referred to as proprietary view and an entity view.Which of the following statements best reflects the two methods:

• A)the proprietary view is required by AASB 132 but only the entity view is consistent with the conceptual framework
• B)an entity may adopted either the entity view or the proprietary view provided the method adopted is disclosed
• C)the entity view is required by AASB 132 but only the proprietary view is consistent with the conceptual framework
• D)neither the proprietary view nor the entity view is consistent with the conceptual framework.

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Definitions:

Liquidating Distribution

Payments made to a company's shareholders when the company is partially or completely liquidated, representing the return of the investor's capital.

Partnership's Liabilities

Debts or financial obligations that a partnership is responsible for, which can affect partners' individual tax situations.

Liability Increase

A financial situation where the obligations or debts of a person or company grow.

Personal-Use Asset

An asset primarily used for the personal enjoyment or needs of an individual or family, as opposed to business or investment use.