In instances of "significant influence" (generally an investment of 20% or more), the investor is required to account for the investment using the equity method.

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When an investor has significant influence over an investee, typically indicated by an ownership interest of 20% or more, the investor is required to use the equity method of accounting to recognize its share of the investee's earnings or losses.

In Instances of "Significant Influence" (Generally an Investment of 20