If an investor owns less than 20% of the common stock of another company as a long-term investment:

Question

Quizplus · Accepted Answer

When an investor owns less than 20% of the common stock of another company as a long-term investment, it is usually considered a passive investment, and the investor usually has little or no influence on the investee. Therefore, the equity method of accounting is not required, and dividends may or may not be received depending on the investee's performance.

If an Investor Owns Less Than 20% of the Common