The accounting method required for jointly controlled entities is:

Question

Quizplus · Accepted Answer

Jointly controlled entities are entities in which two or more parties have joint control over the operational and financial policies. In such cases, the equity method of accounting is required. This provides a way to reflect the joint control and shared profits/losses in the financial statements of the entity. The equity method recognizes the investor's pro-rata share of the net assets in the entity and the investor's share of the entity's profit or loss, and makes adjustments for dividends received and distributions made. Therefore, the correct answer is B, the equity method of accounting.

The Accounting Method Required for Jointly Controlled Entities Is