What is the dominant factor used to distinguish portfolio investments from significant influence investments?

Question

Quizplus · Accepted Answer

The dominant factor used to distinguish portfolio investments from significant influence investments is the investor's intention to establish or maintain a long-term operating relationship with the investee. If the investor intends to establish or maintain a long-term operating relationship with the investee, the investment is usually considered significant influence and accounted for using the Equity Method. If the intention is not to establish or maintain a long-term relationship, it is considered a portfolio investment and accounted for using the Cost Method. The percentage of equity held by the investor is not the dominant factor used to distinguish these types of investments.

What Is the Dominant Factor Used to Distinguish Portfolio Investments