If 15% of the common stock of an investee company is purchased as a long-term investment, the appropriate method of accounting for the investment is:

Question

Quizplus · Accepted Answer

When an investor holds less than 20% of the investee's voting stock, the investment is typically accounted for using the fair value method, such as the available-for-sale method, unless significant influence is evident.

If 15% of the Common Stock of an Investee Company