If a company acquires a 40% ordinary share interest in another company,

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When a company acquires a 40% ordinary share interest in another company, it has the ability to exert significant influence over the activities of the investee. Therefore, the equity method is usually applicable. This method records the investment at cost and includes a proportionate share of the investee's net income or loss on the investor's income statement.

If a Company Acquires a 40% Ordinary Share Interest in Another