Company A owns 25% of the voting shares and has significant influence over Company B. Which method(s) of accounting for the investment in B might be permissible under Australian accounting standards?
A)cost method
B)equity method
C)consolidation method
D)cost method or equity method

Question

Quizplus · Accepted Answer

Company A has significant influence over Company B, so the equity method is permissible. The cost method is also permissible if the investment is not material.

Company a Owns 25% of the Voting Shares and Has