The method that results in the venturer's proportionate share of profits being recognised in a single line item in the statement of comprehensive income is known as:
A)proportionate consolidation
B)the equity method
C)the proportionate method
D)none of the above

Question

Quizplus · Accepted Answer

The method that recognizes the venturer's proportionate share of profits in a single line item in the statement of comprehensive income is known as the equity method. In this method, the investment in the associate is initially recorded at cost and subsequently adjusted for the venturer's share of profits or losses of the associate. This method is used when the venturer has significant influence over the associate, but does not control it.

The Method That Results in the Venturer's Proportionate Share of Profits