In calculating the entity's share of equity of the associate or joint venture, dividend revenue will need to be removed from the entity's consolidated financial statements since the ______________ method will now replace the ______________ method of accounting for the investment.

Question

Quizplus · Accepted Answer

The equity method replaces the cost method when accounting for investments in associates or joint ventures. Under the equity method, dividends received from the associate or joint venture are subtracted from the carrying amount of the investment, not recognized as dividend income.

In Calculating the Entity's Share of Equity of the Associate