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Equity Securities

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Which one is NOT a correct practice under the current GAAP for investments in equity securities?

A) When a firm has 15% of the ownership and the fair value is not available, the firm should use the equity method
B) When a firm has 35% of the ownership, the firm should use the equity method.
C) When a firm has 55% of the ownership, the firm should use the consolidation
D) Although a firm has less than 50% of the ownership, if the firm actually controls the business operation of the target firm, the firm should use the consolidation

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B) When a firm has 35% of the ownership, the firm should use the equity ...

Solution Summary

This solution explains which of the following is not a correct practice under GAAP for investments in equity securities.

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