A parent buys 32 percent of a subsidiary in one year and then buys an additional 40 percent in the next year. In a step acquisition of this type, the original 32 percent acquisition should be maintained at its initial value. adjusted to fair value at the date of the second acquisition with a resulting gain or loss recorded. adjusted to its equity method balance at the date of the second acquisition. adjusted to fair value at the date of the second acquisition with a resulting adjustment to additional paid-in capital