If one company owns more than 20% of the shares of another company and the shares are being held as a long-term investment, which method would normally be used toaccount for this investment?

Question

Quizplus · Accepted Answer

When a company owns more than 20% of another company's shares and holds them as a long-term investment, the equity method is typically used for accounting, as it allows the investor to recognize their share of the investee's profits or losses.

If One Company Owns More Than 20% of the Shares