Mistaken idea “Twenty percent automatically means equity method”

An ownership percentage can create a presumption about significant influence, but it is not an automatic conclusion. Board representation, policy participation, material transactions, management interchange, technological dependence, ownership concentration, restrictions, and contrary evidence can affect the analysis.

A diagnostic asks whether a 30-percent holding always uses the equity method. A bare "yes" shows the threshold error. Correct it by requiring a dated memorandum that weighs both ownership and qualitative evidence, separates influence from control, checks scope, and states unresolved facts. A smaller holding can have strong influence evidence, while a larger holding can have contrary evidence. The conclusion must be supported before the equity-method schedule starts.