All of the following statements regarding accounting for equity investments with controlling influence are true except:
A)These investments are accounted for using fair values with unrealized gains and losses reported in other comprehensive income.
B)The parent uses the consolidation method.
C)The controlling investor is called the parent.
D)Consolidated financial statements show the financial statements of all entities under the parent's control,including all subsidiaries.
E)An investor who owns more than 50% of a company's voting stock has control over the investee.

Question

Quizplus · Accepted Answer

Equity investments with controlling influence are not accounted for using fair values with unrealized gains and losses reported in other comprehensive income. Instead, they are accounted for using the consolidation method, where the parent includes the financial statements of all entities under its control (including subsidiaries) in its own financial statements. The controlling investor is called the parent, and an investor who owns more than 50% of a company's voting stock has control over the investee.

All of the Following Statements Regarding Accounting for Equity Investments