An Investee Company Incurs an Extraordinary Loss During the Period

An investee company incurs an extraordinary loss during the period. The investor appropriately applies the equity method. Which of the following statements is true?

A) Under the equity method, the investor only recognizes its share of investee's income from continuing operations.
B) The extraordinary loss would reduce the value of the investment.
C) The extraordinary loss should increase equity in investee income.
D) The extraordinary loss would not appear on the income statement but would be a component of comprehensive income.
E) The loss would be ignored but shown in the investor's notes to the financial statements.