Under the equity method,the investor recognizes revenue based upon an appropriate share of the investee's net income.

Question

Quizplus · Accepted Answer

This statement is true. Under the equity method, the investor recognizes revenue based on its share (proportionate to its ownership stake) of the investee's net income, which is reported on the investee's income statement. This revenue recognition is a way of reflecting the investor's economic interest in the investee's operations.

Under the Equity Method,the Investor Recognizes Revenue Based Upon an Appropriate