Classifications of Intercorporate Investments

Question 1

Ownership Less than 20% & No significant influence

Answer 1

Investment in Financial Assets (Ammortized cost/ FV through OCI/FV through P&L)

Question 2

Ownership is 20% - 50% & significant influence

Answer 2

Investment in Associates (Equity Method)

Question 3

Ownership more than 50% & Control

Answer 3

Investment in Business Combinations (Acquisition method)

Question 4

Control Shared by 2 or more investors

Answer 4

Joint Venture (Mostly - Equity method, rare cases - Proportionate Consolidation)