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loses significant influence over the associate, the balance of the investment in the associate is recorded

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

If it loses significant influence over the associate, the balance of the investment in the associate is recorded at:
A. Fair value
B. Identifiable net asset property
C. Cost method
D. Keep the equity method

Expert Solution

Step 1

When the company has significant influence over the associate, then equity method should be used for accounting.

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