The Wellness Society, a not-for-profit organization, owns 30% of Walk for Canada, also a not-for-profit organization. The two organizations operate independently and have no board members in common. How should the Wellness Society account for its investment in Walk for Canada?

Question

Quizplus · Accepted Answer

Given that The Wellness Society and Walk for Canada operate independently and have no board members in common, the appropriate accounting treatment for The Wellness Society's investment in Walk for Canada is to provide note disclosure. This disclosure should describe the relationship and the nature and extent of its economic interest, rather than using the cost or equity method, which are typically applied when there is more significant influence or control over the investee.

The Wellness Society, a Not-For-Profit Organization, Owns 30% of Walk