The Complete Equity Method, Used to Facilitate Consolidation in Subsequent

Multiple Choice

The complete equity method, used to facilitate consolidation in subsequent years, differs from the equity method used for external reporting in all the following ways except:

A) The complete equity method adjusts reported income for goodwill impairment losses, while the equity method used for external reporting does not.
B) The complete equity method does not allow the investment balance to become negative due to reported losses, while the equity method used for external reporting adjusts the investment balance for all losses.
C) The complete equity method adjusts reported income for impairment losses on acquqired identifiable intangible assets, while the equity method used for external reporting does not.
D) The complete equity method adjusts for all downstream unconfirmed profits, while the equity method used for external reporting only adjusts for the investor's share of these profits.