Level of ownership-equity method

Assignment Help Accounting Basics

Reference no: EM13136823

If Coca-Cola acquires approximately 14% more of CCE, a majority of the stock will be held so that consolidation becomes a requirement. However, given the size of the present ownership and the dependence that CCE has on Coca-Cola for products and marketing, does Coca-Cola truly have no more than "the ability to exercise significant influence over the operating and financial policies" of CCE? Does the equity method fairly represent the relationship that exists? Or does Coca-Cola actually control CCE despite the level of ownership, and should consolation be required? Should the FASB reexamining the boundary between the application of the equity method and consolidation. Should the rules be rewritten so that Coca-Cola must consolidate CCE rather than use the equity method? If so, at what level of ownership would the equity method no longer be appropriate?

Reference no: EM13136823

Questions Cloud

What do think nora watson meant in her summary : what do think Nora Watson meant in her summary when she said "I think most of us are looking for a calling not a job. Most of us...have jobs that are too small for our spirit. Jobs are not big enough for people"

What are james and pete realized gains on this exchange : Each party assumed the mortgage on the building received. What are James’s and Pete’s realized gains on this exchange, respectively?

Stakeholders critical to program evaluations : What are the three major categories of stakeholders you deem as being critical to the success of your evaluation? Why were these people instrumental to your success?

How should katie treat receipt of the partnership interest : On July 1 of the current year, the unrestricted partnership interest (fair market value of $25,000) was transferred to Katie. How should Katie treat the receipt of the partnership interest in the current year?

Level of ownership-equity method : Should the rules be rewritten so that Coca-Cola must consolidate CCE rather than use the equity method? If so, at what level of ownership would the equity method no longer be appropriate?

Find weight of female using regression model output : The following output is the result of running a linear regression on WEIGHT (y) = average weight in pounds for American females. Based on this regression model output, what will be the weight of a Russian Female who is 71 inches tall?

Terrorist recruitment techniques-group dynamics : What are the benefits to a terrorist group of using suicide bombers to conduct terrorist acts? What, beyond the obvious (once a suicide bomber detonates him/herself that human weapon is no longer in the terrorist group's arsenal) are some of the d..

Should employee create a retirement portfolio : Should employee create a retirement portfolio consist of diversified investments as no-load mutual funds and exchange traded funds?

How many moles of n2 are produced : How many moles of N2 are produced by the decomposition of 1.40 of NaN3 ?

User Account

All Pages