When it comes to the equity method, aka, the one-line consolidation, the entire investment is on one line and n your balance sheet. There should be no goodwill recorded on the investing company's balance sheet, nor should any assets be written up to fair value. The excess of consideration given by the investing company is all reflected in the initial cost basis of the investment.
As a result of this, any impairments on equipment or intangibles within the investee ewill be a reduction in the net income of that investee, which in turn will cause the investor to recognize a loss and reduce their basis in the Company that they invested in.
Essentially, any losses on impairment or normal operations only affect the basis of the investment and net income of the investor.
Hopefully this makes sense as it was a tricky area for me to get comfortable with as well.
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