Question: When a compary holds between 2 0 % and 5 0 % of the outstanding stock of an irvestee, which of the following statements applies?

When a compary holds between

20 %

and

50 %

of the outstanding stock of an irvestee, which of the following statements applies?

The investor should always use the fair value method to account for its investment.

The irnestor should always use the equity method to account for its investment.

"significant influence" over the investee.

The investor should use the equity method to account for its investment unless circumstances indicate that it is unable to exercise "significant influence" over the investee.

When a compary holds between 2 0 % and 5 0 % of

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock blur-text-image

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Students Have Also Explored These Related Accounting Questions!

Theory: 1. Under IFRS, the fair value option A.Must be applied to all instruments the company holds. B.May be selected as a valuation method by the company at any time during the first 2 years of...

Please answer this!!! 1. Under IFRS, the fair value option A. Must be applied to all instmments the company holds. B. May be selected as a valuation method by the company at any time during the rst 2...

When this exam was mailed to you, the 2020 Annual Report for Cisco Systems was also attached to the email. In addition two excerpts from that 10K was also provided: Cisco's Balance Sheet and Cisco's...

1. When a company holds between 20% and 50% of the outstanding ordinary shares of an investee, which of the following statements applies? A. The investor should always use the equity method to...

Multiple Choice Accounting Questions (Simple) Please answer the multiple choice questions below Question 4 Which of the following is NOT correct regarding factoring of receivables? Question 4...

3. When a public company holds between 20% and 50% of the outstanding common shares of an investee, which of the following statements applies? (2) a) The investor should always use the equity method...

Just one part of the assignment, Thank you! 2.22 Risk-return analysis (40%) What are the risks of this company? (Where is this risk coming from (market, firm, industry or currency)? How is the risk...

2.23 Cost of capital (40%) Calculate the company?s cost of equity using various methods (at least 2); showing your calculations and detailing the source of your data. Calculate the company?s cost of...

Please help me with this one FIN2221-Final Project Weight: 20% of Final Grade - Due: End of Week 14 Complete the following assignment in an Excel document - use a new sheet in Excel for each...

I am trying to get help finding a solution to my for my final project for my Financial Accounting class. I am stuck on Part B and Part C. Part B gives you the numbers to fill in for Part C. The...

Why is it appropriate to use the perpetuity formula from Chapter 3 to estimate the value of preferred stock?

Refer to the data for problem 5. a. Find the critical value from the chi-squared table for the 5% level and report the result of the chi-squared test. b. Find the critical value from the chi-squared...

Governmental universities typically report as Group of answer choices Special purpose governments engaged in only governmental activities. General purpose governments. Special purpose governments...

You invested $4,500 in a mutual fund exactly 39 months ago when the NAV of the fund was $31.80. You have not acquired or sold any shares since that time. However, the fund paid a special distribution...