If a company buys the stock of another company, and categorizes it as an equity investment (a financial asset) as tradin
Posted: Tue Nov 23, 2021 8:58 am
If a company buys the stock of another company, and categorizes
it as an equity investment (a financial asset) as trading, which of
the following must be true (under GAAP)?
The company should record realized gains on the equity
investment under other comprehensive income
The company should proportionately consolidate the other
company’s financial statements
The equity investment must have been less than 20% of the equity
of the company whose equity was bought
You should fully consolidate the other company’s financial
statements
it as an equity investment (a financial asset) as trading, which of
the following must be true (under GAAP)?
The company should record realized gains on the equity
investment under other comprehensive income
The company should proportionately consolidate the other
company’s financial statements
The equity investment must have been less than 20% of the equity
of the company whose equity was bought
You should fully consolidate the other company’s financial
statements