Use of the equity method is required for investments between 20 and 50% of a company's voting common stock regardless of the investor's ability to influence the affiliate.

Question

Quizplus · Accepted Answer

The equity method is used when the investor has significant influence over the investee, typically indicated by ownership of 20% to 50% of the voting stock, but the ability to exercise significant influence is a key determinant, not just the percentage ownership.

Use of the Equity Method Is Required for Investments Between