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equity method

   Also found in: Wikipedia 0.04 sec.
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.
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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.
AICPA Audit position statement by California CPA
The total includes fully finished products made by Honda and its subsidiaries as well as unit sales of fully finished products and parts produced locally by affiliates accounted for under the equity method.
Honda Announces Consolidated Financial Summary for the Fiscal 1st ... by JCN Newswires
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.
Exposure draft of SOP issued on audits of investment companies. ... by CPA Letter
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