1. How should an investor, applying the equity method of accounting for an investment, recognize equity method earnings, losses, and dividends declared by an investee? Cite FASB codification to support your answer.

2. Please explain under what circumstances that an investor may not be able to use equity method to account for his investments even though the investor owns more than 20% interest in the investee? Cite FASB codification to support your answer. (Tips: significant influence over an investee).