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Equity method is a method of accounting where investment is calculated of one organization in another entity or investee. It is a technique used by companies in order to calculate their profits that they earned by means of investments. This equity method is an integral part of accounting discipline. Primarily it deals with a lot of terminologies and concepts based on which this method is standing. It is done in an organized manner stepwise with relevant calculations in every step; each having its own importance. So students while they learn equity method seemed to have faced a lot of difficulties in the process of learning.
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- The typical relationship that exists between investor and investee.
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