20-50% Rule

What It Stands For

20-50% ownership → equity method; <20% → fair value; >50% → consolidation

TopicInvestment Accounting
Why It MattersThe 20-50% rule provides a rebuttable presumption for classifying equity investments: significant influence (equity method), control (consolidation), or neither (fair value). ASC 323 / IAS 28 govern the equity method.

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