When an Entity Reduces Its Interest in an Investment in Equity

question 76

Multiple Choice

When an entity reduces its interest in an investment in equity securities accounted for by the equity method, and changes to the fair value method, what is the initial cost value for purposes of subsequent changes in market value?

• A) Book value at the date of change
• B) Original cost
• C) Market value at the date of the change
• D) Market value at the date of acquisition

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Definitions:

Preparation/Determination Stage

A phase in the Transtheoretical Model of change where individuals intend to take action to address a behavior or issue within the next 30 days.

Stage-Matched Intervention

A strategy in health and psychology that tailors treatment to the individual’s readiness to make a change.

Precontemplation Stage

The stage of the Stages of Change model where an individual is not yet considering change or is unaware of the need for change.

Contemplation Stage

A phase in the Transtheoretical Model of Behavioral Change where individuals are aware of the need for change but are hesitant to make a commitment.