Companies often invest in the common stock of other corporations. The way we report these investments depends on the nature of the investment and the investor’s motivation for the investment. The FASB Accounting Standards Codification represents the single source of authoritative U. S. generally accepted accounting principles.
Required:
1. Obtain the relevant authoritative literature on the disclosure of accounting policies using the FASB Accounting Standards Codification at the FASB website (www. fasb. org).
2. What is the specific citation that describes how to account for a change in the level of ownership to a percentage that will mandate the use of the equity method for investments in common stock?
3. What are the specific requirements?

Requirement I

Access FASI3 Accounting Codification Requirement

The specific citation that describes the guidelines for how to account for a change from the cost method to the equity method for investments in common stock is FASB ACS 323-10,5,3: 'Investments-Equity Method and Joint Ventures-Overall-Subsequent Measurement-Increase in Level of Ownership or Degree of Influence'

Requirement 3

35-33 An investment in common stock of an investee that was previously accounted for on other than the equity method may become qualified for use of the equity method by an Increase in the level of ownership (that is, acquisition of additional voting stock by the investor, acquisition or retirement of voting stock by the investee, or other transactions). If an investment qualifies for use of the equity method (that is, falls within the scope of this Subtopic), the investor must adopt the equity method of accounting. The investment, remits of operations (current and prior periods presented), and retained earnings of the investor mug be adjusted retroactively in a manner consistent with the accounting for a step-by-step acquisition of a subsidiary.

answer; the inspector may have found some violation that could cause death or some kind of serious injury;

the answer would be voluntary exchange -

"the act of buyers and sellers freely and willingly engaging in market transactions. moreover, transactions are made in such a way that both the buyer and the seller are better off after the exchange than before it occurred."

hope this : )

-shy