Gumble Ltd

Multiple Choice

Gumble Ltd. has owned 65% of the common shares of Lopez for several years. This year, Gumble reduced its interest in Lopez to 10%. Which of the following statements is true?

A) Gumble must change from reporting under consolidation to the equity method.
B) Gumble must change from reporting under consolidation to the cost method.
C) Gumble must change from reporting under the equity method to the cost method.
D) Gumble is not required to change its reporting method.