For accounting purposes, the method used to account for long-term investments in ordinary shares is determined by

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The method used to account for long-term investments in ordinary shares is determined by the extent of an investor's influence on the operating and financial affairs of the investee. This is because the level of influence determines whether the investment is classified as a joint venture, associate or subsidiary, and each classification has its own accounting method. The amount paid for the shares, whether the shares have paid dividends in the past, and whether the acquisition was friendly or hostile are not relevant factors in determining the accounting method.

For Accounting Purposes, the Method Used to Account for Long-Term