which-of-the-following-best-describes-when-to-use-consolidation-accounting-inste

Question

Which of the following best describes when to use consolidation accounting instead of the equity method?

Accepted Answer

Consolidation is used when the investor has controlling influence, typically more than 50% ownership.

Answer

Consolidation is used when the investor has significant influence, typically 20% to 50% ownership.

Answer

Consolidation is used regardless of the level of influence.

Answer

Consolidation is used when the investor has no influence, typically less than 20% ownership.