The fair value method should be used to account for stock investments of less than 20% of the outstanding shares.

Name: The fair value method should be used to account for stock investments of less than 20% of the outstanding shares.
Brand: Quizplus
Rating: 4.7 (40 reviews)

Question

Quizplus · Accepted Answer

For stock investments of less than 20% of the outstanding shares, the fair value method (also known as the market value method) is typically used, as the investor does not have significant influence over the investee.

The Fair Value Method Should Be Used to Account for Stock