Large Company owns 30% of Small Company and applied the equity method. Small Company has a loss of $50,000 in 2022, which is recorded as follows:

Answer:?

However, there are certain instances that require special handling. For example, losses in the fair value of equity investment are typically ignored, but FASB ASC 323 requires that permanent losses in the value of investment be recorded as an impairment. Suppose the carrying value of an equity investment is $1,300,000 and it is determined that the fair value of the equity has permanently declined to $1,000,000. The reduction in fair value is reported as follows:

Answer:?