Can someone explain the following
Q3 Cinnamon’s shareholder’s equity on its balance sheet would most like be high
A. highest if Cinnamon is deemed to have control over Cambridge
B. independent of the accounting method used for the investment in Cambridge
C. highest if Cinnamon is deemed to have significant influence over Cambridge.
Answer is A - I thought the consolidation method has no impact on equity?
Related to Q5, why would shareholder’s equity will be higher under full goodwill?
Thanks. Someone might have asked the same question but the search function is not working作者: IAmNeil 时间: 2013-4-1 13:05
A change in US GAAP for 2009 (SFAS 160) requires that Minority Interest on consolidated financial statements be reported as a component of equity.
this confusion is from a mistake in Schweser, check the errata作者: random_walker47 时间: 2013-4-1 13:05
priceless ro424!
can you explain why shareholder’s equity is higher under full goodwill?作者: thommo77 时间: 2013-4-1 13:05
Ok, but proportionate consolidation has no minority interest, so the equity is the same as the equity method?作者: Analyze_This 时间: 2013-4-1 13:05
I believe that’s correct.
I don’t have the question in front of me, but full goodwill is reported in minority interest, which is reported in equity, so equity is higher
