- 4 Marks
FR – May 2019 – L2 – Q2d – Financial Reporting Standards and Their Applications
Treatment of Sukura Ltd’s investment in Awoshi Electronics under IFRS 9.
Question
Sukura Ltd entered into a contractual arrangement on 1 September 2018 with another company, Mammobi Ltd, setting up an unquoted entity, Awoshi Electronics. However, Sukura Ltd only has a 15% shareholding and does not have any influence in the day-to-day financial and operating policies. Sukura Ltd has recorded the investment in Awoshi Electronics at its cost on 1 September 2018, being the carrying amount of the equipment and cash transferred at that date. No subsequent changes were made to the carrying amount.
Required:
Advise the directors on the accounting treatment of the above in Sukura Ltd’s financial statements for the year ended 31 December 2018.
Find Related Questions by Tags, levels, etc.
- Tags: Financial Asset, IFRS 9, Investment in Unquoted Shares
- Level: Level 2
- Topic: Financial Reporting Standards and Their Applications
- Series: MAY 2019
Report an error