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The answer is C Why equity consolidation? Based on senario mentioned; the investment company have a significant influence over dividends policy, operating & financial policies and Appointments of board members.
The correct answer is C, as the company has significant influence within 20%- 50% over its divided policy and operating policy.
Answer C 25% - 50% of company and has influence over operating policies.
Very informative
C. Equity consolidation
Walid Hassan
3d
Very informative
Murugan R
3d
Ans: C Equity consolidation
| Consolidation & Financial Reporting | Financial Modeling | Feasibility Studies | Business Valuation | Investment | Finance | Accounting | Chartered Accountant & Auditor | MBA Finance & Banking Candidate
4dcorrect answer is: c. Equity consolidation. When a company owns 20-50% of another company’s voting stock and has significant influence over its operating policies, the equity method is used for accounting. Under the equity method, the investor recognizes its share of the invest income or loss in its own financial statements and adjusts the carrying value of the investment accordingly.