Equity Accounting

Equity Accounting

A method of accounting where a company lists undistributed profits from an affiliated company (or a company in which it holds a substantial, but not controlling, interest) on its balance sheet. This may improve the appearance of the company's financial health, whether or not the undistributed profits are eventually distributed to the company.
References in periodicals archive ?
ASIC raised concerns with not consolidating subsidiaries and not equity accounting associates in the financial report for the year ended 31 December 2016.
Private Equity Accounting, Investor Reporting, And Beyond
The largest declines involved private equity, which reversed a three-year trend of private equity accounting for an increasing proportion of deals.
Moving from proportionate consolidation to equity accounting will affect each of a company's financial statement line items, notably decreasing both revenue and gross assets, even though the net amount at the bottom line should be unaffected," Balasubramanian said.
Under new equity accounting rules for associated companies RAK Petroleum assumes a proportionate share of DNO International's profit and loss in its own financial results as from 2010.
JP Morgan said it has been appointed by IFC Asset Management Company (AMC), a new wholly owned subsidiary of the IFC, a member of the World Bank Group, to provide outsourced private equity accounting and fund administration services.
Other matters that are related to equity accounting.
When the equity investment is less than 20 percent, exclusive agreements between the traditional enterprise and the dot-com may trigger equity accounting, since an exclusive distribution agreement can constitute significant influence.
The importance of transfer-pricing approaches, the treatment of intercompany accounts in consolidation and equity accounting and the need to disclose related-party transactions are new ideas, and it'll take some time for them to be understood and consistently applied.
Representative: President Shinichiro Nishino, Headquarter: Shibuya, Tokyo) from an affiliate held under the equity accounting method to a consolidated subsidiary.
Subjects covered in the report include capital market structures and economic conditions, standard-setting processes, conceptual frameworks, accounting standards, effects of changing prices, business combinations, consolidated and equity accounting and income taxes.
Equity accounting for those subsidiaries is no longer permitted.