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AB acquired a financial investment on 1 January 20X9, incurring $5,000 related agency fees. AB initially classified the investment as held for trading, in accordance with IAS 32 Financial Instruments: Presentation.
Which of the following statements reflects the accounting treatment that AB adopted in respect of this investment when it prepared its financial statements to 31 December 20X9?
GH acquired3,000,000 of the 12,000,000 equity shares of JK. All shares carried equal voting rights and no other single shareholder of JK held more than 10% of the equity shares. GH has the power to participate in the financial and operating policy decisions but not control them.
Based on the information provided above, how would GH's investment in JK be accounted for in its consolidated financial statements?
FG acquired 75% of the equity share capital of HI on 1 September 20X3.
On the date of acquisition, the fair valueof thenet assets wasthe same as thecarrying amount, with the exception of a contingent liability disclosed by HI and relating to a pending legal case. At 1 September 20X3, the contingent liability wasindependentlyvalued at $1.2 million.
At the current year end, 31 March 20X5, the legal case is still outstanding. The fair value ofthe liabilityhas now been estimated at $1.4 million, and the case is expected to be resolved in the forthcoming financial year.
How should this contingent liability be recorded in the consolidated financial statements for the year ended 31 March 20X5?
AB acquired a financial investment on 1 January 20X9, incurring $5,000 related agency fees. AB initially classified the investment as held for trading, in accordance with IAS 32 Financial Instruments: Presentation.
Which of the following statements reflects the accounting treatment that AB adopted in respect of this investment when it prepared its financial statements to 31 December 20X9?
HJ is currently in dispute with an employee, who is claiming $400,000 in a legal case against them.
HJ's legal advisors have stated that it is probable that they willlose the case and will have to pay the amount claimed.
Also, HJ areclaiming $250,000 from a supplierof defective goods and the legal advisors have stated that it is probable that HJ will besuccessful in this claim.
What is the correct accounting treatment for these two items in HJ'sfinancial statements?
