The relevant circumstances that justify differential accounting for intercorporate equity investments depend on the level of influence held by the investor.

Question

Quizplus · Accepted Answer

Differential accounting for intercorporate equity investments depends on the level of influence held by the investor. For example, if the investor holds significant influence over the investee, the equity method of accounting is used, while for non-significant influence, the cost method is used. Therefore, the statement is true.

The Relevant Circumstances That Justify Differential Accounting for Intercorporate Equity