Acquisition Method Question. buyer, net, accounting, together, reading

BC_MBA_student

I am unclear, what does the Acquisition method do to the income statement?

According to Q 12 in reading 21, net income is not affected by accounting method, but in Q 6 in the same reading it appears you add the buyer and the subsidiary income statement items together...

gongwy

equity method及acquisition method下的net income是一样的。

acquisition method：acquiree的net income直接加到acquirer的net income中，但要减去minority interest。

equity method：acquired的net income按比例加到acquirer的net income中。

若上述比例为80%，则：
acquisition method：先加100%再减20%；
equity method：加80%。
二者是等价的。

ayaz_mahmud369

All revenues and expenses are added together. Before your arrive at net income, you deduct the minority share portion of net income, which is total income multiplied by non-controlling interest share of net income.

NO EXCUSES

comp_sci_kid

correct me if i am wrong but across all 3 methods...dats equity, aquisition n proportionate...ni n equity are not effected ...

thecfawannabe

Minority interest is now reported under equity, not liabilities. Thus equity wont be the same under all methods. I assume you're using schweser. Check schweser errata-they made a big mess up of this