GAAP regarding fair value accounting for investments in equity securities will generally apply to an investment when the percentage of ownership of another company is:

Question

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GAAP generally applies fair value accounting for investments in equity securities when the percentage of ownership is less than 20%. This is because ownership below this threshold typically does not grant the investor significant influence over the investee, thus fair value through net income is the appropriate accounting treatment.

GAAP Regarding Fair Value Accounting for Investments in Equity Securities