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When an investor sells shares of its investee company what happens?
If the investor sells the entire investment or any portion of it ,the equity method is applied consistently until the date of disposal.A gain or lss is computed based on the adjusted book value at that time.Remaining shares are accounted for by means of either equity method or the fair-value method , depending on the investor's subsequent ability to significantly influence the investee
A controlling influence over the investee is based on the investor owning voting stock exceeding?
50%
Use of the Cost or Equity Method?
The Cost method is used when investor does not exercise significant influence. The equity method is used to account for investments if significant influence can be exercised by the investor over the investee.
How does the fair value and equity methods of accounting for investments in stocks subsequent to acquisition differ?
Under the fair value method, investments are originally recorded at cost and are reported at fair value. Dividends are reported as other revenues and gains. Under the equity method, investments are originally recorded at cost. Subsequently, the investment account is adjusted for the investor's share of the investee's net income or loss and this amount is recognized in the income of the investor. Dividends received from the investee are reductions in the investment account.
How does the partial equity method differ from the equity method?
The equity method of accounting recognizes income of the investee company as an increase to the investment account by the percentage owned. Dividends received decrease the investment account, again, by the percentage apportioned. ALSO, for any assets that have been appraised at fair value above their book value, the investment account is reduced by the excess depreciation or amortization from these increased values.Under the partial equity method, however, the acquirer ignores the effects of the excess depreciation on the investment account. Therefore, the only items that change the investment account would be income earned by the subsidiary and dividends paid.
When the cost method is used to account for an investment the carrying value of the investment is affected by?
the purchase price of the investment plus any additional costs incurred to acquire and maintain the investment, minus any portion of the investment that has been sold or distributed. The carrying value is adjusted if there is a decrease in the value of the investment as well, typically recorded as an impairment charge. The cost method does not take into account changes in the fair market value of the investment.
What is the correct noun for a company of?
The noun 'company' is used as a collective noun for:a company of actorsa company of angel fisha company of archer fisha company of finchesa company of molesa company of parrotsa company of soldiersa company of widgeon (a type of duck)
What is a company that controls another company?
A company that controls another company is called the parent company and the company it controls is called a subsidiary
When do a company acquire other company?
which was the company that acquired by the intel company
Is Nidhi Company treted as Cheeting Company?
Any company are not a cheeting company including nidhi company. But any company can cheet with people.
What is sister company and mother company?
A sister company is a company with the same owner while a mother company is the owner
Is company a collective noun?
Yes, the noun 'company' is often used as a collective noun. Some examples are:a company of actorsa company of angel fisha company of archer fisha company of finchesa company of molesa company of parrotsa company of soldiersa company of widgeon (a type of duck)
