(Increase in Investments: Cost Method (v2430.01))
This Balance Sheet account represents long-term investments in companies that are reported using the Cost Method. This method applies when the investing company lacks “significant influence,” presumably holding less than 20% of the stock, and intends to hold the investment for years.
The investing company reports these investments based on acquisition cost or market value, whichever is lower. If the investment is in the form of non-equity or non-marketable securities, it is recorded at acquisition cost.
Any dividends from these investments can be entered in Dividends from Investments: Cost (v1190).