Under the equity method, investee companies are referred to as:

Question

Quizplus · Accepted Answer

The equity method is used for accounting for investments in affiliates or companies in which the investor has a significant influence but does not have control. The investee companies are referred to as affiliates under this method. Therefore, option C is the correct choice. The parent company is the investor that holds a controlling interest in the investee company, so option A is incorrect. The subsidiary is the investee company that is controlled by the parent company, so option B is also incorrect. Consolidated company refers to the financial statements that combine the financial results of the parent company and its subsidiaries, which is not relevant to the equity method.

Under the Equity Method, Investee Companies Are Referred to As