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in this video were going to talk about how to use the equity method to account for investments so when you want between twenty and fifty percent of a company stock youre deemed to have docHub influence and so what docHub influence means is that you could alter a firms dividend policy right because you own so much lets say for example you own 40% of a company you could influence whether or not they issue a dividend in the given period and the reason that this is important is because even though that firm youve invested in might be incurring losses you could pressure them you could use this influence that you have to get them to issue a dividend and if we were accounting for things under the fair value method when you own less than 20% of the firm shares you would be recognizing income with that dividend you would have dividend revenue so it would look like you are generating revenue from this investment even when the investment is losing money so to prevent firms from pl