When the equity method is being applied, under what circumstances would an investor’s share of losses in excess of the carrying amount of its investment be recorded?

When the equity method is being applied, under what circumstances would an investor’s share of losses in excess of the carrying amount of its investment be recorded?

Comparison with ASPE

Under ASPE an investor’s share of losses in excess of the carrying amount of the investment is recorded if:

(a)     the investor has guaranteed the obligations of the investee; or

(b)     the investor is otherwise committed to provide further financial support to the investee; or

(c)     the investee seems assured of imminently returning to profitability.

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