Financial Accounting: Tools for Business Decision Making, 8th Edition
Financial Accounting: Tools for Business Decision Making, 8th Edition
8th Edition
ISBN: 9781118953808
Author: Paul D. Kimmel, Jerry J. Weygandt, Donald E. Kieso
Publisher: WILEY
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Chapter AH, Problem 9Q
To determine

Equity method:  It refers to an accounting technique used by an investor to determine the income earned on investments made in long-term equity securities of a company.  Thus, the investor who owns a significant interest by having more than 20%, but less than 50% of ownership, accounts for investments in long-term equity securities under this method.

To explain: the constituents of significant influence when an investor’s financial interest is less than 50%.

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