Question: Sometimes it's necessary to change from the equity method to another method of accounting for an investment. Explain the circumstances that would require such a

Sometimes it's necessary to change from the equity method to another method of accounting for an investment. Explain the circumstances that would require such a change and how the investor would account for this change in the accounting method

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1. Identify your reference point when making a decision based on an element of risk.

3. If there are reasonable alternatives, think about your decisions based on the different reference points and see if there are any contradictions in the decisions.

4. It is only at this point that you can give the problem your full attention in relation to the various ways you have framed the problem.