Which of the Following Is Not True About Accounting for Investments

question 89

Multiple Choice

Which of the following is not true about accounting for investments under IFRS?

• A)IFRS allows proportionate consolidation of investments where two or more investors have joint control.
• B)IFRS is more restrictive than U.S.GAAP concerning when an investor can elect the fair value option.
• C)IFRS requires that the accounting policies of an investee be adjusted to correspond to those of the investor when applying the equity method.
• D)IFRS does not allow use of the equity method where two or more investors have joint control.

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Definitions:

Down Payments

A down payment is the initial, upfront portion of the total amount due, often associated with the purchase of expensive items like a home or a car, which is not financed through a loan.

Interest Rate

The percentage at which interest is paid by a borrower for the use of money that they borrow from a lender.

Investment Banks

Financial institutions that provide services such as underwriting, mergers and acquisitions, and advisory services to corporations and governments.

Lehman Brothers

A former global financial services firm that filed for bankruptcy in 2008, becoming a symbol of the largest bankruptcy in U.S. history and a catalyst for the global financial crisis.