How may a not-for-profit organization account for a portfolio (i.e. non-strategic) investment it has made in a profit-oriented entity?

Question

Quizplus · Accepted Answer

A not-for-profit organization should account for a portfolio investment in a profit-oriented entity by using fair value or the cost method. The fair value method values the investment at its current market value, while the cost method values the investment at its original cost. The equity method (B) is not appropriate for portfolio investments, as it is used for investments in which the organization has significant control or influence over the investee. Proportionate consolidation (C) and consolidation (D) are not appropriate for portfolio investments, as they are used for investments in which the organization has a controlling interest in the investee.

How May a Not-For-Profit Organization Account for a Portfolio (I