There are two accounting methods for long-term equity investment: one is cost method; The second is equity.

1. Scope of application of cost method

(1) The enterprise can control the long-term equity investment of the investee (different from the old standard).

(2) Long-term equity investment in which the enterprise has no control, * * the same control or significant influence on the invested entity, has no quotation in the active market, and its fair value cannot be reliably measured.

2. Scope of application of equity

(1)*** same control; (2) significant.

Comparison of two methods:

The cost method focuses on the initial investment cost, and other changes of the invested enterprise are generally not adjusted.

The equity law focuses on the owner's equity of the invested enterprise. As long as the owner's equity of the invested enterprise changes, the invested enterprise will adjust accordingly.