Fair Value and Equity Methods Conceptual Questions 1 What ar

Fair Value and Equity Methods Conceptual Questions

1. What are the two fair value methods to account for investments?

2. What type of security can be accounted for under both methods?

3. What type of security can be accounted for under only one of these methods? Which method is that?

Solution

Cost method and equity method

Stock or equity securities with more than 50% ownership

Available for sale securities, Equity method