spreads

Under cost method 200 is recorded under non-current assets in BS.

If it is recorded at fair value

* Initially added to BS at fair value. No goodwill is created. For example purchased for 200 and fair value of asset at the time of investing is 180, 20 writes off to IS ( do not recognize 20 goodwill)

*Dividend goes to IS.

* No proportionate income is recognized /added to investment value.

* Instead, subsequent fair value, say market value, changes are recognized in IS, just like HFT.

* Hence, no impairment.

IS = Income statement, BS= Balance sheet

Hope this may help.