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Asked Dec 20, 2019
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When is the equity method the appropriate accounting for equity investments?

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Expert Answer

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Equity method: Equity method is the method used for accounting equity investments which claim a significant influence of above 20% but less than 50% in the outstanding stock of the investee company.

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Step 2
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When the investor company holds above 20% but less than 50% in the outstanding stock of the investee company, then equity method is appropriate to account equity investments.

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Business

Accounting

Financial Accounting