Question: Companies often invest in the common stock of other corporations

Companies often invest in the common stock of other corporations. The way we report these investments depends on the nature of the investment and the investor's motivation for the investment. The FASB Accounting Standards Codification represents the single source of authoritative U.S. generally accepted accounting principles.

Required:
1. Obtain the relevant authoritative literature on accounting for a change from the cost method to the equity method for investments in common stock using the FASB's Codification Research System at the FASB website (www.fasb.org).
2. What is the specific citation that describes how to account for a change from the cost method to the equity method for investments in common stock?
3. What are the specific requirements?


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  • CreatedJuly 11, 2013
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