The hybrid equity method differs from the pure equity method in that:

Question

Quizplus · Accepted Answer

The hybrid equity method differs from the pure equity method as it combines aspects of the cost method and equity method. Under the hybrid equity method, the goodwill component of the purchase price is not shown in a separate account from the investment, and investee revaluations are regarded as adjustments to equity rather than as income. However, like with the equity method, goodwill is not amortized. Therefore, both options B and C are correct.

The Hybrid Equity Method Differs from the Pure Equity Method