Interest recognized in its income statement statement, or separate them into two income interest. Equity Method Accounting Under the equity method, the investor begins as a baseline with the cost of its original investment in the investee, and then in subsequent periods recognizes its share of the profits or losses of the investee, both as adjustments to its original investment as noted on its balance sheet , and also in the investor’s income statement. padding: 20px; Each member firm is a separate legal entity. statements also show the results of management’s stewardship of the resources entrusted to it. display: none!important; c. If a subsidiary were not consolidated but rather accounted for using the equity method, would this change net earnings (loss)? 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