The parties to a joint venture will initially record their share of the investment at the fair value of their contribution made. In subsequent periods, the cost method will be used for reporting purposes.

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In subsequent periods, the equity method is typically used for reporting purposes, not the cost method. Under the equity method, the investment is initially recorded at cost and subsequently adjusted for the investor's share of the joint venture's profits or losses and dividends received.

The Parties to a Joint Venture Will Initially Record Their