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- Title
Equity Method Accounting.
- Authors
Rashty, Josef
- Abstract
Investment fair value method $2,000* Investment equity method $1,150** Retained earnings $50 ** CTA/OCI $100 ** Fair value adjustment in earnings $1,000 * Reflects the fair value of the remaining 10% interest. Equity investments may qualify to apply the equity method of accounting due to an increase in ownership interest or degree of influence; if so, an investor must adjust the balance of its investments. Investment equity method $2,200 Cash $1,100 Investment fair value $1,100 The investor adds the cost of acquiring the additional interest in the investee to the current basis of its investment (ASC 323-10-35-33). Upon a partial disposition (under ASU 2017-05), the investor reduces the carrying amount of its equity method investment and CTA/OCI related to equity method investment proportionately for the interest sold.
- Subjects
ACCOUNTING methods; GOODWILL (Commerce); FAIR value accounting; INVESTORS; REMAINING useful life; CONSOLIDATED financial statements; ACCOUNTING firms
- Publication
CPA Journal, 2023, Vol 93, Issue 1/2, p58
- ISSN
0732-8435
- Publication type
Article