Which of the Following Is Not True About Accounting for Investments

question 10

Multiple Choice

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

• A) IFRS requires the equity method when the investor exercises significant influence over the investee.
• 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.

---

Definitions:

Employee Hours

Employee hours track the amount of labor time worked by employees, used for payroll, scheduling, and operational efficiency analyses.

Square Feet

A unit of area measurement used primarily in the United States, equal to the area of a square with sides of one foot.

Direct Method

A method of preparing the cash flow statement where major classes of gross cash receipts and gross cash payments are disclosed, providing a clear view of cash flow from operating activities.

Service Department

A division within a company responsible for providing support, maintenance, or other services to customers or other departments.