Ch 17.3 ( Holdings Between 20% and 50% - Equity Method) Flashcards
1
Q
Holding between 20% to 50% of equity investment
A
Valuation - Equity
Unrealized Holding Gains of Losses - Not recognized
Other Income Effects - Proportionate share of investee’s net income
2
Q
Significant influence in company through equity investment
A
May be indicated through representation on the board of directors, participation in policy-making processes, material intercompany transactions, interchange of managerial personnel, or technological dependency.
3
Q
Equity Method
A
The investor and the investee acknowledge a substantive economic relationship.