An investment in an associate is normally accounted for using the equity accounting method. This method requires thatthe investment in the associate is__________. Select one: a. initially recorded at cost and not adjusted thereafter b. initially recorded at cost and then adjusted in each subsequent accounting period to reflect the investor’s share ofthe associate’s profit or loss for the year c. initially recorded at cost and then adjusted to fair value at each subsequent reporting period d. initially recorded at fair value and the only adjustments are for dividend income that is declared and paid
An investment in an associate is normally accounted for using the equity accounting method. This method requires thatthe investment in the associate is__________.
Select one:
a.
initially recorded at cost and not adjusted thereafter
b.
initially recorded at cost and then adjusted in each subsequent accounting period to reflect the investor’s share ofthe associate’s profit or loss for the year
c.
initially recorded at cost and then adjusted to fair value at each subsequent reporting period
d.
initially recorded at fair value and the only adjustments are for dividend income that is declared and paid
Whenever investor invests in shares and stock of other company, then ownership rights can be 20%, 20% to 50% or more than 50%. Different methods can be used for accounting for investments as per ownership shares.
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