equity method


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equity method

A method of accounting for an investment in another company in which the book value of the investment reflects a share of the acquired firm's increases in retained earnings. Thus, if Firm A purchases 20% of Firm B's stock and Firm B earns $3 million after taxes during the next year, Firm A will increase the carrying value of its investment by 20% of $3 million, or $600,000. If Firm B pays half its earnings in dividends, Firm A will increase its investment by $300,000.
References in periodicals archive ?
Loss before taxes, equity method investments and other investments held at fair value was USD 18.
In March 2016, FASB issued Accounting Standards Update (ASU) 2016-07, Simplifying the Adjustment to the Equity Method of Accounting.
Operating profit for the business segments includes the Corporation s share of earnings or losses from equity method investees because the operating activities of the equity method investees are closely aligned with the operations of the Corporation s business segments.
8m in the same period last year, based on the equity method.
5 compared to the same period of a year ago, increasing in the fiscal first half for the 9th consecutive year and achieved an all-time record for any fiscal first half due mainly to increased income of affiliates in Asia accounted for under the equity method.
The AICPA's Accounting Standards Executive Committee has issued Statement of Position 07-1, Clarification of the Scope of the Audit and Accounting Guide Investment Companies and Accounting by Parent Companies and Equity Method Investors for Investments in Investment Companies, effective for fiscal years beginning on or after Dec.
The top Japanese drug maker said profits at its equity method affiliates dropped 37.
The company's initial book basis in the new joint venture will be approximately $4 million and it will be accounted for under the equity method.
The instructions require only an amount in column (A) for income statement income (loss) from any equity method foreign corporation; the instructions also require that any dividends from equity method foreign corporations be reported in column (D) of lines 2 through 4.
SYNOPSIS: This paper reports the results of a study of the financial reporting effects of off-balance-sheet activities concealed by the equity method of accounting.
The AICPA's Accounting Standards Executive Committee has issued an exposure draft of a statement of position, Clarification of the Scope of the Audit and Accounting Guide Audits of Investment Companies and Accounting by Parent Companies and Equity Method Investors for Investments in Investment Companies.
In their consolidated statements chapters, most advanced accounting texts include a presentation of the "full" or "complete" equity method from the standpoint of the parent company.