When Are Gains on Intercompany Transfers of Assets Between an Investor

question 48

Multiple Choice

When are gains on intercompany transfers of assets between an investor an associate recognized as part of the investment income accounted for by the investor under the equity method?

• A) In the period when the intercompany transfer takes place.
• B) In the period(s) when the assets are sold to third parties or consumed.
• C) They are never recognized.
• D) They are recognized only when the investment is sold.

---

Definitions:

Group's Composition

The makeup or structure of a group, including the number of members, their roles, demographics, and how they interact.

Heterogeneous Group

A group comprised of individuals with varied characteristics, backgrounds, experiences, or qualities.

Open Format

a structure that allows for flexibility and adaptation, often in the context of meetings, events, or documents.

Scapegoat

An individual or group blamed for wrongs they didn't commit, often to divert attention from the actual source of a problem.