I. Long-term investment

Long-term investment refers to the foreign investment with an investment period of more than one year (including one year). The long-term investment of an enterprise includes foreign investment such as creditor's rights investment, other creditor's rights investment, long-term equity investment and other equity instruments investment.

II. Long-term equity investment

1. Concept

Long-term equity investment refers to the equity investment held by an enterprise in its subsidiaries, joint ventures and associated enterprises, and the equity investment held by an enterprise that has control, * * * common control or significant influence on the investee, and there is no quotation in the active market, and the fair value cannot be reliably measured. The types of long-term equity investment mainly include long-term equity investment formed by business combination under the same control and long-term equity investment formed under different control.

2. Accounting methods

There are two accounting methods for long-term equity investment: cost method and equity method.

(1) Cost method

① Long-term equity investment in which the enterprise can control the invested unit. That is, the long-term equity investment of enterprises in subsidiaries.

② The enterprise can make long-term equity investments that have no control, * * * same control or significant influence on the investee, and there is no quotation in the active market, and the fair value cannot be reliably measured.

(2) equity method

① The enterprise has a long-term equity investment in the investee. That is, the enterprise's long-term equity investment in its joint venture.

② the long-term equity investment that the enterprise has a great influence on the invested entity. That is, the enterprise's long-term equity investment in its associated enterprises.