The major reason for using the equity method instead of the market method for an investment is that the equity method does a better job of recognizing increases or decreases in the economic resources that the investor can influence.

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The equity method provides more detailed information about the financial performance of the investee, and allows the investor to recognize its share of the changes in the investee's economic resources. The market method, on the other hand, only reflects changes in the market value of the investment and may not accurately represent the investor's level of influence over the investee's operations. Therefore, the equity method is generally considered more appropriate for long-term strategic investments where the investor has significant influence or control over the investee's activities.

The Major Reason for Using the Equity Method Instead of the Market