If the investor owns over 50% of the outstanding common stock, the investor is deemed to have control over the operating and financial policies of the investee.

Question

Quizplus · Accepted Answer

According to the Financial Accounting Standards Board (FASB), if an investor owns over 50% of the outstanding common stock of an investee, the investor is deemed to have control over the operating and financial policies of the investee. This is known as the consolidation method of accounting.

If the Investor Owns Over 50% of the Outstanding Common