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6335186971310079
6335186971310079
Stock Investments-
Investor Accounting and Reporting
Aprilia Beta Suandi
Faculty of Economics and Business
Universitas Gadjah Mada
Levels of Influence or Control
* The investor could manipulate its own investment income if income is measured by dividends.
No record.
Note: market price: $25/share; no revaluation needed.
An Exception
If dividend received exceeds the investor’s share of
earnings after the investment has been acquired:
Net income is $15,000 and $2,000 dividend is received.
$50,000 cost
- $2,000 dividends
+ $2,500 income
One-line
Consolidation
= $50,500
Applying the Equity Method