Classify investments as strategic or nonstrategic.}

- There are four possible methods of accounting for nonstrategic investments.

- The fair value through profit and loss method must generally be used for both debt and equity securities under IFRS 9.

- The cost model under ASPE can be used when an investment was not acquired to trade and an active market does not exist for the security. IFRS does not allow the cost method in these circumstances.

- There are three methods of accounting for strategic investments using IFRS:

- Consolidation is required when the investor owns more than \(50 \%\) of the voting common shares of the investee.

- The fair value method is to be used when the investor owns less than \(20 \%\) of the investee's voting common shares.

- The equity method is used for equity securities in which \(20 \%\) to \(50 \%\) of the outstanding common shares are owned.