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The gain or loss from the sale of an equity method investment may be presented in either of the following ways in the income statement:
  • In non-operating income, gross of tax, before the income tax provision
  • In the same line item in which the investor reports the equity in earnings of the investee
These methods are also appropriate to record a gain or loss when the investor's ownership interest is diluted as a result of the investee issuing additional shares, and the investor does not maintain its proportionate ownership interest (i.e., an indirect sale). See EM 5.4 for further information on indirect sales. Appropriate disclosures about the sale should be made in the investor's financial statements as necessary, in accordance with the guidance in ASC 860.
The sale of an equity method investment may, either by itself or in combination with other items, qualify as discontinued operations. For more information on the criteria for reporting discontinued operations, refer to FSP 27.

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