Question

A change from carrying securities at fair value to the equity method of accounting for an investment in common stock resulting from an increase in the number of shares held by the investor requires:

A. only a footnote disclosure
B. that the cumulative amount of the change be shown as a line item on the income statement, net of tax.
C. retroactive restatement as if the investor always had used the equity method.
D. that the investor begins accruing income earned by the investee under the equity method at the date of acquisition of the new shares.

Answer 1

D

Step-by-step explanation:

the investor has to being with accruing income earned by the investee