Question：Which of the following statements is true with regard to group accounts?

　　A. Goodwill arising on consolidation may be capitalised and amortised, or capitalised and reviewed annually for impairment.

　　B. Goodwill must always be capitalised and reviewed for impairment annually.

　　C. Under IFRS 11 joint ventures are to be accounted for using the equity method.

　　D. Under IFRS 11, joint operations are to be accounted for the same way as joint ventures.

　　The correct answers are: Under IFRS 11 joint ventures are to be accounted for using the equity method; Goodwill must always be capitalised and reviewed for impairment annually.

　　Question：T owns 19 % of the shares of K.

　　Which of the following statements most accurately sums up IAS 28's assumption about their relationship?

　　A. K is assumed to not be an associated company of T.

　　B. K is assumed to be an associated company of T.

　　C. K is certain to be an associated company of T.

　　D. K is certainly not an associated company of T.

　　The correct answer is: K is assumed not to be an associated company of T.

　　The key to associate status is the ability of the investing company to be able to exercise significant influence over the company it has invested in.

　　IAS 28 has a rebuttable presumption that a holding of 20% gives this.

　　IAS 28 also recognises however that significant influence can sometimes be achieved with a smaller investment.