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

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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.

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3
Q

Equity Method

A

The investor and the investee acknowledge a substantive economic relationship.

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