The Main Guidance on Equity-Method Reporting,found in ASC 323 and 325

question 45

Multiple Choice

The main guidance on equity-method reporting,found in ASC 323 and 325 requires all of the following except:

• A)The investor's share of the investee's discontinued operations should be reported.
• B)The investor's share of the investee's prior-period adjustments should be reported.
• C)Continued use of the equity-method even if continued losses result in a zero or negative balance in the investment account.
• D)Preferred dividends of the investee should be deducted from net income before the investor computes its share of investee earnings.

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Definitions:

Baseline Measures

Baseline measures refer to the initial data collected at the beginning of a study or assessment period, which is used as a point of comparison for future measurements.

Establishing

The act of setting up or founding something with a firm or stable basis, such as an organization, principle, or relationship.

Function of Goals

The purpose that goals serve, which is typically to provide direction, motivation, and a means of measuring progress.

Purpose

The reason for which something is done or created, or for which something exists.