If an investor owns less than 50 percent of an investee's voting shares, the equity method should always be used to account for the investment.

Question

Quizplus · Accepted Answer

The equity method is only required when an investor owns between 20-50% of an investee's voting shares. If an investor owns less than 20%, they can use the fair value method or the cost method to account for the investment.

If an Investor Owns Less Than 50 Percent of an Investee's