FSA: 80% investment in associate and control control

dvilayphet

I remember we will use consolidate method, and it is 100% consolidate, but why I have impression in some question , we use 80% ratio to combine B/S and I/S. I could find out more detail, but before I spend time search , any body have any quick idea? Thanks.

Otabek

There is a comprehensive illustration solved on Scheweser to reflect the impact on financials due to use of different methods. In practice equity will only be for 20-50% stake unless there exist some special situations detailed by Guille_GE. thanks.

tarunajwani

OP's question is why sometimes you consolidate less than 100% of the assets and liabilities, *after* you have decided it is to be consolidated. This happens with the pooling method, which is no longer used. I don't think there is less than 100% consolidation anymore....anyone confirms?

SpyAli

Yeah I don't really get/remember the pooling method....

Also I think the accounting rules used to have that "bright-line" rule of 20-50% or over 50%, but now it's more based on if you actually have influence (equity method) or control (consolidation), any thoughts?

Houjichasan

yessir, control that minority interest

maryli

AndrewUNH Wrote:
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> That's correct Dreary, you are consolidating the
> whole 100% even though you don't really own 100%,
> therefore that "minority interest" shows up as the
> % that the minority shareholders own.


I can't believe you still don't get the question! He is asking why (sometimes) you only consolidate 60% or 70% or 80%, and not 100%. Let us say company X buys 60% of company Y. Consolidation means you take 100% of company Y's assets and liabilities and merge them into X's. However, there are cases when you only take 60% of company Y's assets and liabilities and merge them into X's.

chandsingh

Wouldn't those cases be joint consolidation?