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In Year 1, the investor acquired 10% ownership of investee and applied fair value method to account for the investment. In Year 2, the investor

In Year 1, the investor acquired 10% ownership of investee and applied fair value method to account for the investment. In Year 2, the investor acquired another 30% ownership and applied equity method to account for the investment (40% ownership). In Year 3, the investor sold 35% ownership of the investee and started using fair value method again to account for the investment (5% ownership). Should the investor apply retrospective adjustment in Year 2 and Year 3?

A.

Yes and Yes

B.

Yes and No

C.

No and No

D.

No and Yes

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