Which of the following methods of accounting for investments is appropriate when the investor has significant influence over the investee?

A) equity method
B) consolidation
C) cost method
D) lower of cost or market method

Equity Method

An accounting technique used to record investments in other companies, where the investment is initially recorded at cost and adjusted thereafter for the investor's share of the investee’s profits or losses.

Significant Influence

The power to participate in the financial and operating policy decisions of another entity, without having control over it.

Investor

An investor is a person or entity that allocates capital with the expectation of receiving financial returns, encompassing a wide range of asset types including equity, debt securities, real estate, and other investment vehicles.