标题: FRA - Joint Venture.. Equity Method vs. Prop Consolidation [打印本页] 作者: mkytz15 时间: 2013-4-8 21:28 标题: FRA - Joint Venture.. Equity Method vs. Prop Consolidation
I am looking at an example that shows the total assets and total liabilities on the balance sheet being higher when using proportionate consolidation vs. the equity method. I see that this is bc of the debt and other assets accounts. Can’t quite rationalize why this is… help 作者: JustasS 时间: 2013-4-8 21:29
Devil is in the details… That is the method..
In proportionate consolidation - you are accounting for proportionately portion of assets and equity of the subsidiary. In the Equity method - only the Proportionate portion of Net assets is included.
You have a 1 liner - Investment in Associate in Equity method.
That # is removed in Prop Consolidation and replaced by assets and liabs going up.作者: thommo77 时间: 2013-4-8 21:29
Also notice that the higher assets/liabilities under proportionate consolidation cancel each other out. Equity is the same under both methods.
