Which of the following observations is NOT consistent with the accounting for investments in equity securities where there is no significant influence?
A)Changes in the number of investment shares resulting from stock dividends,stock splits,or reverse splits must be formally recorded by the investor.
B)Investments are carried by the investor at fair value.
C)The investor recognizes income from the investment as dividends are declared by the investee.
D)When the securities are remeasured to fair value as of the end of each period,any resulting difference is an unrealized gain or loss to be recognized in income.

Question

Quizplus · Accepted Answer

Changes in the number of investment shares resulting from stock dividends, stock splits, or reverse splits would not need to be formally recorded by the investor if there is no significant influence. This is because changes in the number of shares would not impact the investor's ability to influence the investee's decisions.

Which of the Following Observations Is NOT Consistent with the Accounting