It is very important to make a distinction between the way that an investor records invest- ments in its books and the way that the investment is reported in the investor’s financial statements. We’re already seen that reporting may involve cost, fair value, equity, consoli- dation, or proportionate consolidation. Often, an investor will account for a strategic investment by using the cost method during the year simply because it is the easiest method; this is the investor’s recording method. When financial statements are prepared, a different reporting method may be more appropriate for the financial reporting objectives of the com- pany. In that case, the accounts relating.
