Associate company- include or exclude intercompany transfers

CFA Level II FRA
#1

Hi.

If a company uses the equity method of accounting for its investment in an associate (significant influence), what appears on its income statement?

A. Its full % share of the associate’s earnings

B. % share of earnings minus intercompany transfers

Thanks guys.

#2

B.

The book, in other chapter tho, also explain about intercompany transactions. There are 2 methods if I remember well.