Investments non-strategic debt investments require the investor to record interest revenue as it accrues.

Question

Quizplus · Accepted Answer

Non-strategic debt investments are those made with the intention of generating interest income rather than obtaining a significant ownership stake in the investee. As such, the investor is required to record interest revenue as it accrues, typically using the effective interest method. This allows for the recognition of interest income over the life of the investment, rather than only upon receipt of cash payments.

Investments Non-Strategic Debt Investments Require the Investor to Record Interest