Equity Method

The equity method is a method of accounting for investments in which the investor's share of the investee's net assets is reflected in the investor's financial statements. The equity method is used when the investor has significant influence over the investee, but does not have control.

The equity method is based on the assumption that the investor has an interest in the investee's net assets and that the investor's share of the investee's earnings and losses should be reflected in the investor's financial statements. The equity method is also based on the assumption that the investor's share of the investee's earnings and losses should be reflected in the investor's financial statements in the same way as the investor's own earnings and losses.

The equity method is used to account for investments in which the investor has significant influence over the investee, but does not have control. Significant influence is the ability to participate in the financial and operating policies of the investee, but not the ability to control those policies.

The equity method is used to account for investments in which the investor has significant influence over the investee, but does not have control. The equity method is used to account for investments in which the investor has significant influence over the investee, but does not have control.