When is the equity method not used to account for long-term investments in stocks?

Question

Quizplus · Accepted Answer

When an investment is greater than 50% of the voting stock and control is achieved, consolidation accounting must be used instead of the equity method. The equity method is used when significant influence can be achieved, which is typically when owning between 20% and 50% of the voting stock. Therefore, choices A and D are incorrect. While owning 30% of the voting stock may provide significant influence, it does not trigger the need for consolidation accounting.

When Is the Equity Method Not Used to Account for Long-Term