Intermediate Accounting Study Set 7
Quiz 16: Investing Assets
If an investor has significant influence over an investee, but doesn't control the decisions that are made, the investor must use the equity method to account for this investment.
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How does IFRS account for equity investments when there is no significant influence?
Under the equity method of accounting for investments, dividends received from the investee are credited to Dividend Revenue for the investor.
Under the equity method, the investor decreases the value of the investment when it receives cash dividends.
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