If an investor has significant influence over an investee, but doesn't control the decisions that are made, the investor must use the equity method to account for this investment.

Question

Quizplus · Accepted Answer

The equity method is used when an investor has significant influence over an investee, typically indicated by owning 20% to 50% of the voting stock, but does not have full control.

If an Investor Has Significant Influence Over an Investee, but Doesn't