What technique of accounting should web-browser use

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Reference no: EM134057

Question :

Web-Browser, a non-public corporation, is an application service provider. Web-Browser gives web-based, full-service employee eligibility administration and benefits to mid- sized companies and professional benefit preparation administrators serving middle market clients.

In 1998, Web-Browser acquired a 15 % limited partner interest in Internet Access Company (Internet Access), a limited partnership, for $100,000. Suppose that Internet Access is not a variable interest entity and could not be accounted for under FIN 46(R), Consolidation of Variable Interest Entities.

In June 1999, Web-Browser acquired an additional 15 % limited partner interest in Internet Access for $100,000 and loaned Internet Access $184,000 to support its ongoing operations. The $184,000 loan funded all of Internet Access' cash needs for the previous six-month period and was treated by Web-Browser as an advance for accounting purposes.


  • What technique of accounting should Web-Browser use to account for its investment in Internet Access at 31st December, 1998, and June 30, 1999 (i.e., cost or equity method)?

Reference no: EM134057


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