The equity method was created with the intent to counter manipulation from a company using their influence to change other related companies dividend policies. The equity method can be manipulated through the means of using their dividend policy to increase their current earning to profit growth targets. Companies can also manipulate their percentage of ownership of affiliates when they are earning or losing profits to report higher profit or avoid reporting losses. An example of this is where a company buys their investee's company for less than 20% to prevent reporting losses on their financial statements.