🏷️ LIMITED TIME OFFER: GET 20% OFF GRADE+ YEARLY SUBSCRIPTION →
Log in
Accounting
1
answer
0
watching
59
views
16 Aug 2018

Using the equity method in accounting for investments hasbeen called "One Line Consolidation." Why? Is this the best methodand why?

Watch
1
answer
0
watching
59
views

For unlimited access to Homework Help, a Homework+ subscription is required.

Deanna Hettinger
Deanna HettingerLv2
17 Aug 2018

Unlock all answers

Get 1 free homework help answer.
Already have an account? Log in
Share

Related questions

100% Ownership Land Transfer (Non-Depreciable) • On 3/31/X5,Parker Inc. sold land costing $40,000 to its 100% owned subsidiary,Stubben Inc., for $100,000.

• In this example, we’ll do consolidation worksheet entrieswithout adjusting the equity method accounts.

• This is the modified equity method.

• This is meant to be a conceptual exercise only. (We willswitch to the fully adjusted equity method next.)

Required:

1. Prepare the consolidation entry(ies) as of 12/31/X5 and12/31/X6.

2. Prepare the consolidation entry at 12/31/X7, assuming thatStubben sold the land in 20X7 for $120,000.

Accounting standards update, ASU 2016-01, is effective forpublicly traded companies with a fiscal year beginning afterDecember 31, 2017. The accounting update now requires companies toclassify its equity investments at fair value, except thoseaccounted for using the Equity Method. In other words, equityinvestments are no longer classified as available-for-salesecurities. Based on your knowledge of the accounting for equityinvestments, what is the financial reporting implications for acompany that typically makes equity investments classified asavailable-for-sale? What impact might this reporting requirementhave?

"Equity Method of Accounting" Please respond to thefollowing:

Determine the fundamental reasons why Financial AccountingStandards Board (FASB) requires a company to use the equity methodof accounting for investments. Next, propose two (2) theoreticalproblems of recognizing equity income that the opponents of theequity method would consider. Provide a rationale for yourresponse.

In the role of chief executive officer (CEO) for a midsizedcompany, propose the type of managerial incentives that couldinfluence the company’s percentage ownership in another company.Provide a rationale for your response.

Related Documents

ACC 4100 Lecture Notes - Lecture 6: Special Purpose Entity, Equity Method, Financial Statement
scarletsnail973
ACC 4100 Chapter Notes - Chapter ch 1: Historical Cost, Intangible Asset, Financial Statement
scarletsnail973
ACC 4100 Chapter Notes - Chapter ch 4: Equity Method, Income Statement
scarletsnail973

Weekly leaderboard

Home
Homework Help 3,900,000
Accounting 580,000
Start filling in the gaps now
Log in