When a company holds between 20% and 50% of the outstanding stock of an investee, which of the following statements applies?
A The investor should use the equity method to account for its investment unless circum-stances indicate that it is unable to exercise "significant influence" over the investee
B The investor should always use the fair value method to account for its investment.
C The investor should always use the equity method to account for its investment.
D The investor must use the fair value method unless it can clearly demonstrate the ability to exercise "significant influence" over the investee
Acc/423 Acc423 Intermediate financial accounting iii final exam
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