Accounting for Equity Investments in Entities – An Overview of Cost, Fair Value, Equity Method vs. Consolidation Rules

One way to invest in another entity is through an investor’s purchase of equity shares of an investee.  Proper accounting for these equity investments depends on the extent of ownership and influence that the investor has over the investee.  It also depends on whether the equity securities are readily marketable. 

This course provides an overview of properly accounting for equity investments under the cost method, fair value method, equity method, and the consolidation method.