Equity method definition
Written by True Tamplin, BSc, CEPF®
Updated on July 10, 2021
What is meant by the equity method?
Equity method is a method of accounting for long-term investments by which the investment is first recorded at its acquisition cost. However, the investment account is adjusted to reflect the proportionate increase or decrease in the investee’s net income or loss for the period, and the declaration of dividends.