CFA Note

Tuesday, March 14, 2006

what if the company had marginal instead of significant control over X (the 50% holding)?

If they have marginal control, rather than controlling interest, than you use the equity method. Controlling would require you to consolidate. Significant is equity, controlling is consolidation, and marginal or not significant is cost

If investment is over 20% and/or significant influence it should be treated like equity.

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