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Accounting > Equity Method of Accounting
The following information is about Equity Method of Accounting.
Equity Method of Accounting Defined
Investors cost basis is adjusted up or down (in proportion to the % of stock ownership) as the investee's retained earnings fluctuation; used for long-term investments in equity securities of affiliate where holder can exert significant influence; 20% ownership or greater is arbitrarily presumed to have significant influence over the investee.
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