The FASB has recently been considering changes to the requirements to the equity method accounting. There would be a new criterion that "the investment is related to the investor's consolidated business". Without that relationship, the equity method would Not be used, but rather the fair market value would be recorded, even when there is significant influence on investee. 

Do you agree with this new criterion? Why? Argue on both sides/ argue in the affirmative.

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The equity method investor is required to add the cost of acquiring the additional interest in the i... View the full answer