If an investee's net assets are not equal to their fair value,an additional adjustment is required under the equity method of accounting for investments.

Question

Quizplus · Accepted Answer

This is true. The equity method requires an adjustment to the investment account if the net assets of the investee are not equal to their fair value. This adjustment is made to reflect the investor's proportionate share of the investee's net assets at fair value.

If an Investee's Net Assets Are Not Equal to Their