Preston Company, a U.S. auto part manufacturer, owns the majority of the voting stock of SEO Bearings Company, located in China. Preston uses the equity method to report its investment in SEO Bearings.

Which situation justifies this reporting choice?

Select one:

A.SEO is controlled by the Chinese government.

B.SEO is located in China.

C.SEO's decisions are the responsibility of SEO's CEO.

D.SEO's board of directors includes representation from other entities.