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Assuming That a Company's Ownership Interest in the Associate Increases

Question 45

Multiple Choice

Assuming that a company's ownership interest in the Associate increases or decreases,how are changes from the Cost to the Equity Method (or vice-versa) to be handled?

A) Changes from the Cost Method to the Equity Method are to be handled prospectively,while changes from the Equity Method to the Cost Method are to be handled retroactively.
B) Changes from the Cost Method to the Equity Method are to be handled retroactively,while changes from the Equity Method to the Cost Method are to be handled prospectively.
C) Any change is to be handled retroactively.
D) Any change is to be handled prospectively.

Correct Answer: