When an investor owns between 20% and 50% of the ordinary shares of a corporation, it is generally presumed that the investor

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When an investor owns between 20% and 50% of the ordinary shares of a corporation, it is generally presumed that the investor has significant influence on the investee and that the equity method should be used to account for the investment. This is because owning between 20% and 50% of the ordinary shares typically gives the investor the ability to participate in the financial and operating decisions of the investee.

When an Investor Owns Between 20% and 50% of the Ordinary