Businesses purchase ownership stakes in other companies to achieve objectives they cannot achieve alone. The ownership percentage and that ownership's character determine how the business accounts for ...

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 ...

FASB’s efforts to simplify accounting continued Tuesday, when the board issued a standard eliminating the requirement to retroactively adopt the equity method of accounting when an investment ...

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 ...

FASB took steps to simplify accounting in two areas last week when it voted to direct the board’s staff to prepare a pair of proposed Accounting Standards Updates. Upon written approval by FASB, the ...

Investopedia contributors come from a range of backgrounds, and over 25 years there have been thousands of expert writers and editors who have contributed. Eric's career includes extensive work in ...

Will Kenton is an expert on the economy and investing laws and regulations. He previously held senior editorial roles at Investopedia and Kapitall Wire and holds a MA in Economics from The New School ...