What Is Centration

question 15

Essay

What is centration?

Recognize how intra-entity transactions affect the investment account under the equity method.

Determine the appropriate accounting treatment for downward and upward adjustments in the value of investments.

Recognize the accounting treatments for gains and losses under the equity method.

Calculate and understand the treatment of goodwill and other intangible assets in equity method investments.

---

Definitions:

Degrees of Freedom

The count of independent pieces of information available to estimate another statistic, crucial in defining the distribution of various test statistics.

Contingency Table

A table used in statistics to display the frequency distribution of variables to show the relationship between them.

Level of Significance

The probability of rejecting the null hypothesis in a statistical test when it is in fact true; commonly set thresholds include 0.05 or 0.01.

Null Hypothesis

The null hypothesis is a statement or hypothesis that there is no significant difference or effect, typically to be tested against an alternative hypothesis.