Comparing Equity method to Consolidation (acquisition method), is Equity the same between those two, assuming its shares purchase are less than 100%?
Schweser flat out tells you they are the same, but doing EOC #3 (Reading 21), CFAI tells you equity is higher under consolidation (looks like CFAI includes minority(non-controlling) interest into the equity equation, am i getting this right?作者: maratikus 时间: 2013-4-3 22:36
Use the search function.
Net Income is the same in the two methods.
Equity is higher in Acquisition method.作者: maratikus 时间: 2013-4-3 22:48
Schweser is wrong on this one for sure. I have not checked their errata though.
Equity under Equity method and Acquisition method will NOT be same, unless it is a 100% acquisition.
Edit: Previously NCI was reported under mezzanine section and not under Equity. So, Equity was same then. Schweser needs to update its text for this accounting change.
