In Year 1, the investor acquired 10% ownership of the investee and applied the fair value method
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Question:
In Year 1, the investor acquired 10% ownership of the investee and applied the fair value method to account for the investment. In Year 2, the investor acquired another 30% ownership and applied the equity method to account for the investment (40% ownership). In Year 3, the investor sold 35% ownership of the investee and started using the fair value method again to account for the investment (5% ownership). Should the investor apply retrospective adjustment in Year 2 and Year 3?
A. Yes and Yes
B. Yes and No
C. No and No
D. No and Yes
Related Book For
South Western Federal Taxation 2016 Corporations Partnerships Estates and Trusts
ISBN: 9781305399884
39th edition
Authors: James Boyd, William Hoffman, Raabe, David Maloney, Young
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