IFRS 11 - Joint Arrangement

13. It is characterized by a contractual arrangement whereby two or more parties have joint control of the arrangement. a. Joint arrangement b. Joint operation c. Joint venture d. Jointly controlled asset

a.

16. It is a type of joint arrangement whereby the parties that have joint control of the arrangement have rights to the net assets of the arrangement a. Joint venture b. Jointly controlled asset c. Joint operation d. Joint business

a.

19. Under IFRS 11, how shall the joint venturer account for its Investment in Joint Venture? a. Equity method b. Cost method c. Fair value method under IFRS 9 d. Proportionate consolidation

a.

20. Under IFRS 11, as an exception to the general rule of mandatory equity method of accounting for Investment in Joint Venture, what is alternative treatment available to joint venture for an investment in joint venture held or is held indirectly through an entity that is a venture capital organization, mutual trust fund, unit trust and similar entities including insurance-liked fund? a. It may elect to measure the investment in joint venture at fair value through profit or loss b. It may elect to measure the investment in joint venture at fair value through other comprehensive income c. It may elect to measure the investment in joint venture at cost method d. It may elect to measure the investment in joint venture at proportionate consolidation.

a.

4. It is a joint arrangement whereby the parties with joint control of the arrangement have rights to the net assets of the arrangements a. Joint operation b. Joint venture c. Joint undertaking d. Joint entity

a.

5. It is a joint arrangement that is structured without a separate vehicle. a. Joint operation b. Joint venture c. Joint asset d. Joint entity

a.

6. It is the joint arrangement that involves the establishment of a corporation in which each party has an equity interest in the net assets of the corporation. a. Joint venture b. Joint operation c. Joint undertaking d. Joint entity

a.

10. Two entities established a business. The contractual agreement provided that the relevant activities of the business will require unanimous consent of the two parties. The business is not incorporated before SEC. The two parties equally own interest in the said business. How should the two parties account for their investment? a. Equity method b. Joint operation c. Joint venture d. Business combination

b.

12. Two entities established a joint arrangement in an incorporated entity. The assets and liabilities of the entity will be in the name of the incorporated entity. The activities of the arrangement will be decided by its own board of directors. The rights of the two parties are limited only to the net assets of incorporated entity. How should the two parties account for their investment? a. Financial asset at amortized cost b. Joint venture c. Joint operation d. Investment in trading securities

b.

17. What is the classification of the joint arrangement when the arrangement is structured without a separate vehicle such as when the rights of each party to the total assets and obligations for total liabilities relating to the arrangement are clearly established? a. It shall be classified as joint venture b. It shall be classified as joint operation c. Neither joint venture nor joint operation d. It can be either a joint operation or joint venture depending on the company policy of the parties to the joint arrangement

b.

8. What is the method of accounting for investment in joint venture? a. Cost method b. Equity method c. Consolidation method d. Fair value method

b.

1. This is defined as an arrangement in which two or more parties have joint control a. Joint operation b. Joint venture c. Joint arrangement d. Joint undertaking

c.

11. Two entities structured a joint arrangement in an incorporated entity. The two entities each have a 50% ownership interest. The purpose of the arrangement is for the incorporated entity ot manufacture parts for the two parties. The arrangement ensures that the two parties operate the facility that produces the parts to their specifications. The parties agreed to purchase all the output produced by the two parties in the ratio of their ownership percentage. The incorporated entity may not sell its output to third parties unless this is approved by the two parties. The arrangement is intended to operated at a break even level because the selling price is set by both parties and deigned to cover the costs of production and administrative expenses incurred by the incorporated entity. How should the two parties account for their investment? a. Financial asset at fair value other comprehensive income b. Joint venture c. Joint operation d. Financial asset at fair value profit or loss

c.

14. It is the contractually agreed sharing of control of an arrangement which exists only when decisions about relevant activities require unanimous consent of the parties sharing control. a. Control b. Significant influence c. Joint control d. Solidary control

c.

15. It is a type of joint arrangement whereby the parties that have joint control of the arrangement have right to the total assets and obligations for the total liabilities relating to the arrangement. a. Joint venture b. Jointly controlled asset c. Joint operation d. Joint business

c.

7. A joint arrangement that is structured through a separate vehicle should be accounted for as a. Joint operation b. Joint venture c. Either joint operation or joint venture depending on the legal form of the separate vehicle d. Neither joint operation nor joint venture.

c.

9. When an investment in joint venture is held by a venture capital organization, mutual trust fund, unit trust and insurance-linked fund a. The entity must apply the equity method of accounting b. The entity must apply the fair value method of accounting. c. The entity may elect to measure the investment in joint venture at fair value through profit or loss. d. The entity may elect to measure the investment in joint venture at fair value through other comprehensive income

c.

18. What is the classification of the joint arrangement when the assets and liabilities relating to the arrangement are held by a separate vehicle or when the arrangement is established with separate vehicle? a. It shall be classified as joint venture b. It shall be classified as joint operation c. Neither joint venture nor joint operation d. It can be either a joint operation or joint venture depending on the legal form o f the separate vehicle, terms of the contractual arrangement or other relevant facts and circumstance.

d.

2. Which is a characteristic of a joint arrangement? a. The parties are bound by a contractual arrangement b. The contractual arrangement gives two or more parties joint control over the arrangement c. The parties are bound by a contractual arrangement which gives two or more parties absolute control over the arrangement d. The parties are bound by a contractual arrangement which gives two or more parties joint control over the arrangement

d.

21. Under IFRS for SMEs, how shall the joint venture account for its Investment in Joint Venture? a. Equity method b. Cost method c. Fair value method under IFRS 9 d. Any of the above

d.

22. Under IFRS 11, how shall the joint operator account for its interest in a joint operation? a. The joint operator shall account for its interest under Equity Method b. The joint operator shall account for its interest under Cost Method c. The joint operator shall account for its interest using proportionate consolidation d. The joint operator shall account for its interest by recognizing its assets, its liabilities, its revenue, its expenses and its shares in the jointly controlled assets, jointly incurred liabilities, jointly earned revenue and jointly incurred expenses in accordance with the contractual arrangement.

d.

3. Join control is defined as a. The power to govern the financial and operating policies of another entity so as to obtain benefits from its activities b. The power to participate in the financial and operating policy decisions of another entity. c. The contractually agree sharing of control of an arrangement which exists only when decisions about relevant activities require majority consent of the parties sharing control d. The contractually agree sharing of control of an arrangement which exists only when decisions about relevant activities require unanimous consent of the parties sharing control.

d.