When a company holds between 20% and 50% of the outstanding stock of an investee, which ofthe following statements applies?

a.The investor should always use the equity method to account for its investment.
b.The investor should use the equity method to account for its investment unless circumstancesindicate that it is unable to exercise "significant influence" over the investee.
c.The investor must use the fair value method unless it can clearly demonstrate the ability toexercise "significant influence" over the investee.d.The investor should always use the fair value method to account for its investment

Question

danteF2639 danteF2639

17-01-2020
Business

contestada

When a company holds between 20% and 50% of the outstanding stock of an investee, which ofthe following statements applies?

a.The investor should always use the equity method to account for its investment.
b.The investor should use the equity method to account for its investment unless circumstancesindicate that it is unable to exercise "significant influence" over the investee.
c.The investor must use the fair value method unless it can clearly demonstrate the ability toexercise "significant influence" over the investee.d.The investor should always use the fair value method to account for its investment

Respuesta :

Otras preguntas

is 25.00 equivalent to 25/100

economies where goods and services are traded directly for other goods and services are called ________ economies.

a layer of dense connective tissue that covers the entire eyeball except the cornea is called

What volume in liters of H2 gas would be produced by the complete reaction of 2.93 g of Al solid at STP according to the following reaction? Remember 1 mol of a

What are we without society

To earn a profit, managers must acquire, coordinate, and control all of the following resources EXCEPT people. competitive products, services. money. raw materi

Identify the three domains of life according to the classification system developed by Carl Woese. A) Archaea B) Prokarya C) Viruses D) Bacteria E) Eukarya

Researchers have been studying the evolution of bighorn sheep in response to trophy hunting at Ram Mountain, Canada, since 1973. This population was intensively

What is the simplified factorial of 8!+9!

Which of the following will cause an increase in the supply of a product? A) production increases B) establishment of new companies C) both a and b D) neither a

agustinsr99 agustinsr99 · Answer 1 · 2020-01-19T22:04:56+01:00

Answer: The correct answer is "b. The investor should use the equity method to account for its investment unless circumstancesindicate that it is unable to exercise "significant influence" over the investee."

Explanation: When a company holds between 20% and 50% of the outstanding stock of an investee, the investor should use the equity method to account for its investment unless circumstancesindicate that it is unable to exercise "significant influence" over the investee.

If the company owns between 20% and 50% of the shares in circulation of the controlled company, it can be considered that the company that owns the shares exerts significant influence on the controlled company, in this case if the opposite is not proven, You must apply the equity method.