Assuming That a Company's Ownership Interest in the Associate Increases

question 3

Multiple Choice

Assuming that a company's ownership interest in the Associate increases or decreases,how are changes from the Cost to the Equity Method (or vice-versa) to be handled?

• A)Changes from the Cost Method to the Equity Method are to be handled prospectively,while changes from the Equity Method to the Cost Method are to be handled retroactively.
• B)Changes from the Cost Method to the Equity Method are to be handled retroactively,while changes from the Equity Method to the Cost 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:

Extinction

In behavioral psychology, it refers to the process where a conditioned response decreases in frequency and eventually disappears when the reinforcement is no longer presented.

Conditioned Stimulus

An initially unimportant stimulus that, following its association with an unconditioned stimulus, comes to evoke a conditioned response.

Unconditioned Stimulus

A stimulus that naturally triggers a response without any prior learning.

Generalization

In psychology, the tendency to respond in the same way to different but similar stimuli; in learning, it's the application of past learning to new situations.