If an Investment Accounted for Using the Equity Method Suffers

question 17

Multiple Choice

If an investment accounted for using the equity method suffers an impairment loss and the value in use of the investment subsequently recovers, what accounting entry should be made?

• A) None; once an investment has been written down, it cannot subsequently be written up.
• B) It may be written up in value but not more than the amount of the impairment loss that was recorded at the time of impairment.
• C) It may be revalued to fair value with the revaluation gain going to net income, even if the recorded gain will exceed the original impairment loss.
• D) It may be revalued to fair value with the revaluation gain going to other comprehensive income, even if the recorded gain will exceed the original impairment loss.
• Bloom's

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Definitions:

Reaction

The procedure in which substances, known as reactants, are chemically changed to produce one or more different substances, the products.

Organic Chemistry

The field of chemistry focused on examining the structure, characteristics, makeup, reactions, and creation of compounds that include carbon.

Major Organic Product

The main substance produced in an organic chemical reaction, which is created in higher quantities than any other resulting substances.

Organic Chemistry

The branch of chemistry that studies the structure, properties, and reactions of organic compounds containing carbon atoms.