How does the fair value and equity methods of accounting for investments in stocks subsequent to acquisition differ?

Under the fair

value method, investments are originally recorded at cost and are

reported at fair value. Dividends are reported as other revenues

and gains. Under the equity method, investments are originally

recorded at cost. Subsequently, the investment account is adjusted

for the investor's share of the investee's net income or loss and

this amount is recognized in the income of the investor. Dividends

received from the investee are reductions in the investment

account.