On January 1, 2018, Jordan Inc. acquired 30% of Nico Corp. Jordan used the equity method to account for the investment. On January 1, 2019, Jordan sold two-thirds of its investment in Nico. It no longer had the ability to exercise significant influence over the operations of Nico. How should Jordan account for this change?

Multiple Choice

• Jordan should continue to use the equity method to maintain consistency in its financial statements.
• Jordan should restate the prior years' financial statements and change the balance in the investment account as if the fair-value method had been used since 2018.
• Jordan has the option of using either the equity method or the fair-value method for 2018 and future years.
• Jordan should report the effect of the change from the equity to the fair-value method as a retrospective change in accounting principle.
• Jordan should use the fair-value method for 2019 and future years, but should not make a retrospective adjustment to the investment account.