Advanced Accounting – Multiple Choice Questions


multiple ch 11 e1361788246124 Advanced Accounting Multiple Choice Questions
The correct answer is C.

In case investment percentage is less than 50%, fair value method may be applied, if investor has no significant control over financial and operating policies of the investee. Usually this is a case when ownership percentage is less than 20%.

In case investor has significant control over financial and operating policies of the investee, equity method to be applied. Usually this is a case when ownership percentage is more than 20%.

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