What are the two types of passive equity investments? What is the appropriate method of accounting for these investments?
Answer to relevant QuestionsWhat is the difference between fair value through profit and loss (FVTPL) investments and fair value through other comprehensive income (FVTOCI) investments?Why do many parent corporations prefer to own 100% of the shares of their subsidiaries, rather than smaller proportions? What advantages are there to a parent in owning less than 100% of its subsidiaries?How are strategic investments reported under accounting standards for private enterprises?Why do users of private- company financial statements often prefer non- consolidated financial statements?Harry Inc., a publicly traded company, purchased 1,000 shares, constituting a 40% owner-ship interest, in Sally Inc. on January 1, 20X1 for $ 150,000. Harry Inc.’s income under the cost basis for 20X1 is $ 80,000. ...
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