For non-consolidated subsidiaries where the parent owns less than a majority interest but more than a 20 percent interest,

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The equity method must be used by U.S. companies for investments in non-consolidated subsidiaries when the parent owns a significant influence over the subsidiary, typically interpreted as an ownership interest of 20% to 50%. This method involves recognizing income in proportion to the parent's share of the subsidiary's earnings and adjusting the investment's carrying amount accordingly.

For Non-Consolidated Subsidiaries Where the Parent Owns Less Than a Majority