If the investor sells part of its stake in an associate, accounted for using the equity method, which of the following is used to calculate the gain or loss on the sale of these shares?

Question

Quizplus · Accepted Answer

When an investor sells part of its stake in an associate, accounted for using the equity method, the gain or loss on the sale is calculated based on the average carrying amount of the investment. This is calculated as the average of the original purchase price of the shares in question and the associate's earnings and losses attributable to those shares since the initial investment. Therefore, the correct choice is A.

If the Investor Sells Part of Its Stake in an Associate