What is the name of the opposite of the equity method of accounting?

I am looking for the name of the method that you would use to account for your investment if own less than 20% of the company or do not exert influence.

What is the name of the opposite of the equity method of accounting?
Investment in Associates





A holding of 20% or more of the voting power (directly or through subsidiaries) will indicate significant influence unless it can be clearly demonstrated otherwise. If the holding is less than 20%, the investor will be presumed not to have significant influence unless such influence can be clearly demonstrated.





If the Investment is less than 20%; the investment can be accounted for as either





1. Trading security at FAIR VALUE


2. Available fo sale security at FAIR VALUE


3. Nonmarketable equity security at COST (Cost Method)





But if significant influence is less than 20% or even if it is greater than 20% but the influence is not clearly demonstrated, the company must cease to use the EQUITY METHOD and carry the associate using the COST METHOD.





The carrying amount of the investment at the date it ceases to be an associate shall be regarded as its cost on initial measurement as a financial asset.





The COST METHOD is a method of accounting for investement whereby the investment is recognized at COST. The investor recognizes income from the investment only up to the extent that the investor receives distributions from accumulated profits of the investee arising after the date of acquisiton (dividends). Distributions received in excess of such profts are regarded as a recovery of investment and are recognized as a reduction of the cost of the investment (liquidating dividends).








Enjoy Accounting!
Reply:The cost method is the other alternative to accounting for investments.