Here we have a holding company and our holding company owns between 20% and 50% of EA company That's an equity affiliate and it can be given a number of other names including equity investments or an associate Regardless of the name, they're all the same They all represent the holding company having significant influence (so it's not 1% or 2% ownership, it is significant) But it's not control, it's not over 50% What does this mean? It means you must use equity method accounting And that answers the question, what are equity method investments? They're these investments where you own between 20-50% and have significant influence Now an alternative to that is a JV company (a joint venture company) That's where you have shared control with another owner But again you must use equity method accounting for that investment Now how does that compare to other investments the holding company may have? Well in this case we're going to be looking at subsidiaries and that's where the holding company has control. It has a majority of votes in these subsidiaries If a company is treated as a subsidiary i.e. you've got more than 50% Then you must produce consolidated financials for all subsidiaries So we'll now have holding companies accounts which will include all of the assets and liabilities etc of subsidiary 1 and subsidiary 2