Question #82

Reading: Reading 8 Intercorporate Investments

PDF File: Reading 8 Intercorporate Investments.pdf

Page: 37

Status: Unattempted

Correct Answer: A

Part of Context Group: Q82-84 First in Group
Shared Context
- Haggs wonders which accounting method Simpson uses to calculate the book value of the BC investment for the year ending December 31, 1999. Which is the correct method? A) Equity method. B) Acquisition method. C) Investment in Financial Assets method.
Question
Haggs wonders which accounting method Simpson uses to calculate the book value of the BC investment for the year ending December 31, 1998. Which is the correct method?
Answer Choices:
A. Investment in Financial Assets method
B. Equity method
C. Acquisition method
Explanation
When a company owns a non-influential and non-controlling interest in another company the investment must be carried at fair value. Simpson must carry its BC investment at fair value for 1998.
Actions
Practice Flashcards