FRA- Equity method of Investment in Associates

Suppose we report a negative value of the investee’s earings. That is we report losses which do not exceed the carrying value of the investor’s investment.

Do we report this investor’s proportionate share of the investee’s loss on the investor’s I/S.

Pls note that this is provided that the loss does not exceed the carrying value of investment. That is before the equity method can be abandonded.

Can you do the above given a profit? In the case of losses the mathematics/accounting is the same, i.e. reduce earnings and reduce investment on the balance sheet.

Yes: losses are reported on the income statement.