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Basic Question 0 of 2

Which statement is false for joint ventures accounting?

I. The U.S. GAAP does not permit the proportionate consolidation method.
II. IFRS recommends the proportionate consolidation method.
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User Contributed Comments 4

User Comment
cfaajay U.S.GAAP does allow Proportionate consolidation for unincorporated entities ..such as in construction industry..but U.S.GAAP prefers equity method.
thebkr777 Does this not contradict the chart they gave us? "US: Equity method. IFRS Equity or Proportionate consolidation"
SRI2010 thebkr777, in my opinion, the second one is false because the IFRS doesnt explicity recommend the proportionate consolidation method. it is "either-or"
davidt876 "Both IFRS and U.S. GAAP require the equity method of accounting for joint ventures" - is what the notes just said
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I passed! I did not get a chance to tell you before the exam - but your site was excellent. I will definitely take it next year for Level II.
Tamara Schultz

Tamara Schultz

Learning Outcome Statements

describe foreign currency transaction exposure, including accounting for and disclosures about foreign currency transaction gains and losses;

analyze how changes in exchange rates affect the translated sales of the subsidiary and parent company;

CFA® 2025 Level II Curriculum, Volume 2, Module 12.