The carrying amount means that the actual value or cost of the underlying asset while mentioned during the purchase. The carrying amount of assets is sometimes different from the value stated by market. Under the Equity method, the carrying amount is updated by the share of company income or losses and it decreases the carrying value by any dividends received on the shares. The correct option for ascertaining the differentiation between the recording of common stock in investee company between the equity method and the fair value method.

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Chapter 2, Problem 2.1.3E

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The carrying amount means that the actual value or cost of the underlying asset while mentioned during the purchase. The carrying amount of assets is sometimes different from the value stated by market. Under the Equity method, the carrying amount is updated by the share of company income or losses and it decreases the carrying value by any dividends received on the shares.

The correct option for ascertaining the differentiation between the recording of common stock in investee company between the equity method and the fair value method.

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