When preparing the equity accounting adjustments in the consolidated financial statements,losses on the investment will:

Question

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Losses on the investment should be accounted for in the current year as well as all prior years in which the investment was held by the parent company, in order to properly reflect the impact of the loss on the consolidated financial statements. This is in accordance with the equity method of accounting for investments.

When Preparing the Equity Accounting Adjustments in the Consolidated Financial