Equity-method reporting situations
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In what types of situations could it be appropriate to use equity-method reporting even though the investor does not hold voting common stock of the investee? Explain.
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Solution Summary
Your tutorial is 225 words and gives several examples of significant influence without having voting common stock.
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You use the equity method when you can significantly influenced (but not control) a partially owned subsidiary. This is presumed, under U.S. accounting standards, to mean generally 20-50% of the voting stock. This "bright line" is just a guide and the facts and circumstances can dictate significant influence with more ...
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