Basic Intercorporate Investments Question getting, between, reported, question, difference

stockjaguar

I know its a rather basic question, but I'm getting tripped up on this.

When talking about intercorporate investments

What is the difference between EQUITY INCOME reported on the parents income statement
and INVESTMENT INCOME?


Thanks in advance for any responses.

jacksparrow

Investment Income (as reported on Income Statement) includes dividends. Normally for investments in financial assets.

Equity Income (as reported on Income Statement) does not include dividends. Dividends decrease the investment account and increase cash. Used for equity investments