Swanson Ltd. holds 15% of the common shares of Virginia Inc. Swanson is able to appoint three members of Virginia’s 12-member board of directors and is a supplier of raw materials to Virginia. The remaining 85% of Virginia’s common shares are widely held. Virginia is a private company. Assuming that Swanson reports under ASPE, what are the reporting options for its investment in Virginia? Question 4 options: a) Swanson must use the fair value method. b) Swanson must use the consolidation method. c) Swanson can use the cost or fair value method. d) Swanson can use the cost or equity method.

Under USPE, if the company has the voting interest in another company, it would be free the choose…

Swanson Ltd. holds 15% of the common shares of Virginia Inc. Swanson is able to appoint three members of Virginia’s 12-member board of directors and is a supplier of raw materials to Virginia. The remaining 85% of Virginia’s common shares are widely held. Virginia is a private company.

Swanson Ltd. holds 15% of the common shares of Virginia Inc. Swanson is able to appoint three members of Virginia’s 12-member board of directors and is a supplier of raw materials to Virginia. The remaining 85% of Virginia’s common shares are widely held. Virginia is a private company.

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter13: Investments And Long-term Receivables

Section: Chapter Questions

Problem 27GI

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Question 4 options:

a)	Swanson must use the fair value method.

b)	Swanson must use the consolidation method.

c)	Swanson can use the cost or fair value method.

d)	Swanson can use the cost or equity method.

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