The equity method of accounting for a share investment should generally be used when the investor owns 20-50% of the investee's shares,because that level of share ownership:

Question

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The equity method of accounting is used when the investor has significant influence over the investee. Generally, share ownership between 20-50% is considered to give the investor significant influence over the investee. The other choices are incorrect as share ownership of 20-50% does not require the investor to notify the government of plans to acquire a controlling interest, does not necessarily indicate a plan to acquire a controlling interest, and does not represent a controlling interest in the investee.

The Equity Method of Accounting for a Share Investment Should