The equity method is a way to account for investments in which an investor has significant influence over the investee, but not control. However, there are certain circumstances where the equity method is not appropriate. Let's go through each option and see which ones demonstrate situations where the equity method would not be suitable:
a) If there is an agreement between the investor and the investee where the investor surrenders significant rights as a shareholder, the equity method is not appropriate. This means that the investor is giving up important shareholder rights, which would impact their ability to exercise significant influence over the investee.
b) If there is a concentration of ownership where the investee is operated without considering the views of the investor, the equity method is not appropriate. In this case, the investor's influence is not being taken into account, and they would not have significant influence over the investee.
c) If the investor attempts but fails to obtain representation on the investee's board of directors, the equity method is not appropriate. This means that the investor is not able to have a say in the major decisions of the investee, which would affect their ability to exercise significant influence.
d) If an entity can exercise control over an investee, regardless of ownership level, consolidation is required. This means that if the investor has the ability to control the investee, even if they don't have a majority ownership, they need to consolidate the investee's financial statements instead of using the equity method.
In summary, the equity method is not appropriate if there is an agreement where the investor surrenders significant rights, a concentration of ownership that ignores the investor's views, or if the investor fails to obtain representation on the investee's board. Additionally, if the investor can exercise control over the investee, consolidation is required instead of using the equity method.