Unrealized Gains & Losses for Equity Method!!

There is a statement that I do not get in the question sets of the institute, _ US GAAP allows the option of recording an equity method investment at fair value with the gains and losses going to profit and loss. _

Unrealized gain from the change in fair value:

($37.60 – $35.00) × 4 million shares = $10.4

Dividend income:

$1.20/share × 4 million shares = 4.8

Total investment income = $15.2

What I have studied is that equity method income is recorded as N.I*the company’s ownership % which is recorded in the income statment.

As for the carrying value, it is the original price+earnings -dividends

But why would I calculate the unrealized gain or loss!!

Because the fair value through profit/loss method requires you to do so. Probably not the detailed answer you wanted to hear but it’s just the way it is.

They calculation is a financial asset, not equity method.

So in that sense I record the unrecognized gain or loss between the Fair Mrkt value and the book value in the I/S as well as adding the divided received in the I/S?