The equity method of accounting is always used to account for share investments which convey significant influence.

Question

Quizplus · Accepted Answer

The equity method is commonly used when an investor has significant influence over the investee, typically indicated by owning 20% to 50% of the voting stock, but it is not always used. The decision to use the equity method can depend on various factors, including the purpose of the investment and the investor's ability to exercise significant influence in practice.

The Equity Method of Accounting Is Always Used to Account