When the Investor's Level of Influence Changes, It May Be

question 122

Multiple Choice

When the investor's level of influence changes, it may be necessary to change to the equity method from another method. When the level of ownership rises from less than 20% to a range of 20% to 50%, the equity method typically would become appropriate and the investment account balance should be:

• A)Retrospectively adjusted to the balance that would have existed if the equity method had been in effect for prior years.
• B)Carried over as is with no adjustment necessary.
• C)Carried over at fair market value on date of transfer.
• D)Adjusted to reflect amortized cost.

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Definitions:

Organized Sports

Structured physical activities, typically involving teams or leagues, governed by rules, and often requiring coordinated training and coaching.

Physically Ready

A state of having achieved the necessary physical development and strength to engage in a particular activity or task.

Participate

To take part or become involved in a particular activity, event, or situation.

Enuresis

Repeated urination in clothing or in bed.