How are IASB requirements to account for joint ventures different from U.S.GAAP?
A)International standards require the equity method,but U.S.GAAP allows for flexibility in accounting for joint ventures.
B)U)S.GAAP requires the equity method,whereas the international standards allow for proportionate consolidation.
C)IASB standards and U.S.GAAP are essentially the same for accounting for joint ventures.
D)IASB standards do not specify which methods are allowed to account for joint ventures,whereas U.S.GAAP requires proportional consolidation.

Question

Quizplus · Accepted Answer

The main difference between IASB requirements and U.S.GAAP is that IASB requires the equity method for accounting for joint ventures, while U.S.GAAP requires proportional consolidation. Proportional consolidation means that the joint venture's assets, liabilities, revenues, and expenses are combined in proportion to the investor's percentage ownership in the joint venture. The equity method, on the other hand, requires the investor to recognize its share of the joint venture's profits or losses in its income statement.

How Are IASB Requirements to Account for Joint Ventures Different