Fisher Corporation has the following investments at September 30,2016:

What method of accounting will Fisher use to account for its investment in Cookstown if this investment is classified as an associate?

Question

Fisher Corporation has the following investments at September 30,2016:

What method of accounting will Fisher use to account for its investment in Cookstown if this investment is classified as an associate?

Quizplus · Accepted Answer

Fisher will use the equity method to account for its investment in Cookstown if it is classified as an associate. This is because the equity method is used when the investor has significant influence over the investee (which is typically the case with associates), and involves recognizing the investor's share of the investee's net income or losses on the investor's income statement.

Fisher Corporation Has the Following Investments at September 30,2016