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When an Enterprise Increases Its Interest in an Investment in Equity

Question 55

Multiple Choice

When an enterprise increases its interest in an investment in equity securities accounted for by the fair value method,and changes to the equity method,what is the initial carrying value for purposes of subsequent application of the equity method?


A) Book value at the date of the change
B) Original cost plus or minus the net market value change since acquisition
C) Market value at the date of the change
D) The amount that would be reflected in the investment account had the equity method been in use continually since the purchase of the securities

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