The relevant circumstance in determining the reporting method for non-consolidated intercorporate equity investments is effective control.

Question

Quizplus · Accepted Answer

The relevant circumstance in determining the reporting method for non-consolidated intercorporate equity investments is the level of influence, not effective control. Investments are classified as either passive investments (less than 20% ownership), significant influence investments (20%-50% ownership), or control investments (more than 50% ownership but not consolidated for various reasons), with different reporting methods such as cost, equity, or fair value method depending on the level of ownership and influence, not solely on effective control.

The Relevant Circumstance in Determining the Reporting Method for Non-Consolidated