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What is Accounting for Equity Investments about?
This chapter discusses the equity method of accounting for investments. There are four main methods to account for investments in other companies - fair value, cost, consolidation, and equity method. The method used depends on the level of influence the investor has over the investee. The equity method is used when an investor has significant influence, usually through 20-50% ownership. Under the equity method, the investment is initially recorded at cost and subsequently adjusted to recognize the investor
- Author
- nawaf almatruk
- Language
- EN