Adele Holdings Ltd shares joint control over a joint arrangement, Sherrin Ltd, with the company's two foundingshareholders. Adele Holdings Ltd accounts for its equity interest in Sherrin Ltd in accordance with IFRS 11 JointArrangements. At a later date, Adele Holdings Ltd obtains control over the business of Sherrin Ltd by purchasingthe remaining interest held by the founding shareholders in Sherrin Ltd. Which of the following statements iscorrect regarding Adele Holdings Ltd's accounting in Sherrin Ltd?a: Adele Holdings Ltd should remeasure its previously held interest in Sherrin Ltd at the acquisition date whetherthe activities of Sherrin Ltd meet the definition of a business or not.O b.Adele Holdings Ltd should not remeasure its previously held interest in Sherrin Ltd at the date of acquisition ofthe remaining interest held by the founding shareholders.C. Adele Holdings Ltd may determine whether it shall remeasure its previously held interest in Sherrin Ltd at its choicein accord with its accounting policy.d. Adele Holdings Ltd should not remeasure its previously held interest in Sherrin Ltd, as the re-measurementrequirements relating to the previously held interest do not apply to joint arrangements.

A joint arrangement is a that type of business formation which has been started by the parties…

Answered: the remaining interest held by the…

the remaining interest held by the founding shareholders in Sherrin Ltd. Which of the following statements is correct regarding Adele Holdings Ltď's accounting in Sherrin Ltd?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

Adele Holdings Ltd shares joint control over a joint arrangement, Sherrin Ltd, with the company's two founding
shareholders. Adele Holdings Ltd accounts for its equity interest in Sherrin Ltd in accordance with IFRS 11 Joint
Arrangements. At a later date, Adele Holdings Ltd obtains control over the business of Sherrin Ltd by purchasing
the remaining interest held by the founding shareholders in Sherrin Ltd. Which of the following statements is
correct regarding Adele Holdings Ltd's accounting in Sherrin Ltd?
a: Adele Holdings Ltd should remeasure its previously held interest in Sherrin Ltd at the acquisition date whether
the activities of Sherrin Ltd meet the definition of a business or not.
O b.
Adele Holdings Ltd should not remeasure its previously held interest in Sherrin Ltd at the date of acquisition of
the remaining interest held by the founding shareholders.
C. Adele Holdings Ltd may determine whether it shall remeasure its previously held interest in Sherrin Ltd at its choice
in accord with its accounting policy.
d. Adele Holdings Ltd should not remeasure its previously held interest in Sherrin Ltd, as the re-measurement
requirements relating to the previously held interest do not apply to joint arrangements.

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