When an investment accounted for under the equity method is sold, the gain or loss reported on the statement of earnings is the difference between the selling price and its original cost.

Question

Quizplus · Accepted Answer

The gain or loss reported is the difference between the selling price and the carrying amount of the investment on the investor's books, which includes the investor's share of the investee's earnings and losses since acquisition, not the original cost.

When an Investment Accounted for Under the Equity Method Is