Ritva Co purchased a 38% interest in Saron Ltd on October 1,20X9 for $765,000.The management of Ritva is now preparing the first set of financial statements since the acquisition and is unsure of how to report the investment.
a.If Ritva is a publicly traded company following IFRS,can the investment be reported on an equity basis? On the cost basis? At fair market value through profit or loss? Under what circumstances would each of these be appropriate for reporting purposes? What would be the impact on net earnings under each method? What is the impact on the investment account under each method?
b.If Ritva is a privately held corporation following ASPE,can the investment be reported on an equity basis? Or on the cost basis? Or at fair market value through profit or loss? Under what circumstances would each of these be appropriate for reporting purposes?

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The Answer of Ritva Co purchased a 38% interest in Saron Ltd on October 1,20X9 for $765,000.The management of Ritva is now preparing the first set of financial statements since the acquisition and is unsure of how to report the investment.
a.If Ritva is a publicly traded company following IFRS,can the investment be reported on an equity basis? On the cost basis? At fair market value through profit or loss? Under what circumstances would each of these be appropriate for reporting purposes? What would be the impact on net earnings under each method? What is the impact on the investment account under each method?
b.If Ritva is a privately held corporation following ASPE,can the investment be reported on an equity basis? Or on the cost basis? Or at fair market value through profit or loss? Under what circumstances would each of these be appropriate for reporting purposes?

Ritva Co Purchased a 38% Interest in Saron Ltd on October