Acquisition Method Question. buyer, net, accounting, together, reading

BC_MBA_student

I am unclear, what does the Acquisition method do to the income statement?

According to Q 12 in reading 21, net income is not affected by accounting method, but in Q 6 in the same reading it appears you add the buyer and the subsidiary income statement items together...

comp_sci_kid

correct me if i am wrong but across all 3 methods...dats equity, aquisition n proportionate...ni n equity are not effected ...

thecfawannabe

Minority interest is now reported under equity, not liabilities. Thus equity wont be the same under all methods. I assume you're using schweser. Check schweser errata-they made a big mess up of this

ayaz_mahmud369

All revenues and expenses are added together. Before your arrive at net income, you deduct the minority share portion of net income, which is total income multiplied by non-controlling interest share of net income.

NO EXCUSES

gongwy

equity method及acquisition method下的net income是一样的。

acquisition method：acquiree的net income直接加到acquirer的net income中，但要减去minority interest。

equity method：acquired的net income按比例加到acquirer的net income中。

若上述比例为80%，则：
acquisition method：先加100%再减20%；
equity method：加80%。
二者是等价的。