Transformation of accounting methods for long-term equity investment
(A) the cost method to equity method
When the cost method is changed to the equity method, the book value of long-term equity investment under the cost method should be taken as the initial investment cost calculated according to the equity method.
(B) the equity method to the cost method
1. If the original investment in an associated enterprise or joint venture is changed to an investment in a subsidiary due to additional investment, the book value of the long-term equity investment shall be adjusted in accordance with relevant regulations.
2. In addition, if the accounting of long-term equity investment is changed from the equity method to the cost method due to the reduction of investment, the book value of the long-term equity investment at the time of conversion shall be taken as the basis of the cost method accounting.
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