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Unformatted text preview: Accounting Methods for Long-Term Investments Percent owned by investor Accounting method Up to 20% Available-for-Sale 20 - 50% Equity Method More than 50% Consolidation Available-for-Sale Investments • Can be classified as current or long-term Based on how long management intends to hold the investment • Initially recorded at cost • Cash dividends received are recorded as revenue Stock dividends indicated by memorandum • Reported at market value on the balance sheet Considered more relevant for decision making...
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This note was uploaded on 06/14/2011 for the course ACCOUNTING 23020 taught by Professor Na during the Spring '11 term at Kent State.
- Spring '11
- Financial Accounting