Which of the following statements about changes from or to the equity method is true?

Part $2$ of $2$

$5\mathrm{.}88$

points

Multiple Choice

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Companies are not allowed to change from the equity method to another method.

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References

Companies are not allowed to change from another method to the equity method.

If the equity method is discontinued, the balance in the investment account serves as the new cost basis for writing the investment up or down to fair value in the next set of financial statements.