Investments with insignificant influence are reported on the:
A)income statement using fair value method.
B)balance sheet at cost.
C)balance sheet using fair value method.
D)income statement at cost.

Question

Quizplus · Accepted Answer

Investments with insignificant influence are reported on the balance sheet using the fair value method. This means that any changes in the value of the investments are recognized in the income statement each reporting period. Reporting the investment at cost (B) or on the income statement at cost (D) are not correct because this does not reflect any changes in the value of the investment. Reporting the investment on the income statement using the fair value method (A) is incorrect because this method is only used for investments with significant influence.

Investments with Insignificant Influence Are Reported on The