When significant influence exists,the investment should be accounted for by the equity method.

Question

Quizplus · Accepted Answer

According to the International Financial Reporting Standards (IFRS), if an entity has significant influence over another entity, it should account for its investment in that entity using the equity method. This applies to investments in which the investor has the ability to participate in the financial and operating policy decisions of the investee, but does not control them entirely. Therefore, when significant influence exists, the investment should be accounted for by the equity method.

When Significant Influence Exists,the Investment Should Be Accounted for by the Equity