Under the equity method, fair-value changes in the investee company's stock are not reflected in the investor's accounting records.

Question

Quizplus · Accepted Answer

Under the equity method, the investor recognizes its share of the investee's profits or losses, and any changes in the fair value of the investee's stock are not recorded in the investor's accounting records. The focus is on the investor's share of earnings, not market value changes.

Under the Equity Method, Fair-Value Changes in the Investee Company's