When investments in associate or joint ventures are reported using the equity method, IFRS requires the application of ________.
A)proprietary theory
B)parent-company theory
C)parent-company extension theory
D)entity theory

Question

Quizplus · Accepted Answer

IFRS requires the application of the proprietary theory when investments in associate or joint ventures are reported using the equity method. The proprietary theory views the investment as a proportional ownership interest in the investee, and the investor's share of the investee's net income or loss is recognized in the investor's financial statements.

When Investments in Associate or Joint Ventures Are Reported Using