Asked by Andrea S. Marrero on Jun 11, 2024
Verified
Regal has elected the fair value option to account for equity method investments.The fair value of the Air investment as of December 31,2015 was $295,000.The carrying value of the Air investment on December 31,2015 was
A) $295,000.
B) $300,000.
C) $310,500.
D) $313,500.
Straight-Line Depreciation
An accounting method that allocates the cost of an asset evenly over its useful life.
Voting Stock
Shares in a company that give the shareholder the right to vote on company matters, such as electing the board of directors.
Fair Value Option
An election that allows companies to report specific financial assets and liabilities at their fair values, with changes in fair value recognized in the income statement.
- Comprehend the equity method of accounting, including the effects of dividends and fair value adjustments on investment.
- Clarify the outcomes associated with the selection of the fair value option in the handling of equity method investments and the conditions for recognizing impairment of goodwill.
Verified Answer
GP
Learning Objectives
- Comprehend the equity method of accounting, including the effects of dividends and fair value adjustments on investment.
- Clarify the outcomes associated with the selection of the fair value option in the handling of equity method investments and the conditions for recognizing impairment of goodwill.