If a Company Acquires a 40% Interest in Another Company

question 89

Multiple Choice

If a company acquires a 40% interest in another company

• A)the equity method is usually applicable.
• B)it would always have a controlling interest.
• C)One of the fair value models is usually applicable.
• D)the investor does not have the ability to exert significant influence over the investee.

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Definitions:

Fixed Assets

Fixed Assets are long-term tangible assets, such as buildings, machinery, and equipment, used in the operation of a business and not expected to be converted to cash in the next year.

Operating Fund

A pool of resources designated for the ongoing operational expenses of an organization.

Deferral Method

An accounting practice where revenue or expenses are recorded in a period different from when they are actually earned or incurred.

Programmatic Reporting

A method of reporting that involves the use of automated software to generate data reports, often used in digital advertising and marketing.