Acton Company uses the equity method to report its investment in 35% of the stock of Bates Company. Its original investment cost exceeded 35% of the book value of Bates by a large amount. Acton is computing equity in net income of Bates for the current year, which is five years after the acquisition. Which situation below requires Acton to adjust the equity in net income number for the current year, for write-offs of basis differences? Attribute the difference to:

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The Answer of Acton Company uses the equity method to report its investment in 35% of the stock of Bates Company. Its original investment cost exceeded 35% of the book value of Bates by a large amount. Acton is computing equity in net income of Bates for the current year, which is five years after the acquisition. Which situation below requires Acton to adjust the equity in net income number for the current year, for write-offs of basis differences? Attribute the difference to:

Acton Company Uses the Equity Method to Report Its Investment