Question

In the case of an investment in equity securities where the investor does not have significant influence and the investment is carried at fair value, a dividend from the investee is:

Answer 1

Answer: b. Income to the investor in the period of declaration

Step-by-step explanation:

When an investor does not have a significant influence in a company which is usually defined as owning more than 20%, the dividends they receive will simply be calculated as income in the period it was declared.

If they had Significant influence then the Equity Method would have applied and led to more complex recording.