Came across a bunch of questions, looking to make the distinction clear...
B/S = Balance Sheet, I/S = Income Statement, CFS = Cash Flow Statement, Div = Dividends
Equity method:
B/S impact:
Dividends received reduce your Equity Investment Account
Dividends received increase your Cash Account
I/S impact:
No effect on I/S (it is a line item BELOW Net Income)
CFS impact:
Increases CFO (GAAP or IFRS) or CFI (only IFRS)
Acquisition method:
B/S impact:
Dividends received --- ??????
Dividends received increase your Cash Account
I/S impact:
No effect on I/S (but where does it show up?)
CFS impact:
Increases CFO (GAAP or IFRS) or CFI (only IFRS)
Proportionate Consolidation method:
I imagine would be the same as Acquisition method...
Thots?作者: giorgio10 时间: 2011-7-13 13:44
Buff.... I wouldnt approach it that way... Break it down as follow:
No influence:
HFT - only p&l
HTM - N/A
AFS - p&l
Influence:
- yes it increases you cash, but for Reporting assume it is already there in your cash balance
- decreases you investment balance
Control:
- no impact on p&l
Now for cf it always goes through CFI
- Guille作者: YAhmed 时间: 2011-7-13 13:44
tiredofstudying: One correction from your post:
For acquisition method,
There is no such thing called "Dividends received". The acquirer does not receive dividends from the acquiree because acquiree is a subsidiary. Am I right?
Dividends are paid from the acquirer and part of these dividends go to Minority interest shareholders.
Cash goes down when dividends are paid.
Best of luck to you all in your forthcoming exams.
