The method of accounting for investments in equity securities in which the investor records its share of periodic net income of the investee is the

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The equity method is the method of accounting for investments in equity securities in which the investor records its share of periodic net income of the investee. It is appropriate when the investor has significant influence over the investee, but does not have control over its operations. The cost method records investments at their original cost and makes no adjustments to reflect changes in the fair value of the investments, while the market method records investments at their fair value and recognizes any changes in value in the investor's income statement. The income method is not a recognized method of accounting for investments in equity securities.

The Method of Accounting for Investments in Equity Securities in Which