If an Investor's Ownership Interest in a Significant Influence Investment

question 14

Multiple Choice

If an investor's ownership interest in a significant influence investment increases or decreases, how are changes from accounting at fair value to the use of the Equity Method (or vice-versa) to be handled?

• A) Changes from the Equity Method are to be handled prospectively, while changes to the Equity Method are to be handled retroactively.
• B) Changes from the Equity Method are to be handled retroactively, while changes to the Equity Method are to be handled prospectively.
• C) Any change is to be handled retroactively.
• D) Any change is to be handled prospectively.

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Definitions:

Need-Based Theory

A theory that emphasizes understanding human motivation in terms of specific needs, such as safety, esteem, and self-actualization.

Cognitive Perspective

A psychological approach that focuses on the mental processes involved in knowledge acquisition, perception, memory, and problem-solving.

Goal Theory

A psychological framework suggesting that setting and striving for specific, challenging goals can significantly improve performance.

Motivated

Having the desire or willingness to act or work towards a goal due to personal interest or external incentives.