what companies use the equity method?

Answer 1

"Equity method" is a type of accounting treatment for investments. It is used for companies that are:

a) 20% to 50% owned, and
b) are not materially controlled by the parent company.

This contrasts to:

i) cost method (for less than 20% owned)
ii) consolidated (for over 50% ownership and/or parent company management control)

Equity method means that the parent company records the pro-rata amount of the subsidiary's profit or losses (e.g. 25% owned company earns $100, the parent company would record $25 equity-accounted profits as "non-operating income".). Dividends are treated as a return of capital, rather than income.

I hope that helps.