When one company has an interest in another company it has equity in that company. Under certain circumstances, the appropriate way for the company to account for that investment on its own books is ...

The cost and equity methods of accounting are used by companies to account for investments they make in other companies. In general, the cost method is used when the investment doesn't result in a ...

The equity method of investment is a method used by companies to account for investments in other companies where they hold significant influence, but not full control. Typically, this is applied when ...

A corporation initially books the investment in another company's shares as a noncurrent asset with a value equal to the purchase cost. Whenever the investee issues an earnings report, the investor ...

For most investors, the proper way to account for your investing profits and losses is with the cost method of accounting. This method is not the only choice, however. For investments where the ...

Please note: This item is from our archives and was published in 2001. It is provided for historical reference. The content may be out of date and links may no longer function. The proposed SOP is ...