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Topic: Intercompany Transactions/ Equity Method (

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Winks1139
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Joined: 15 Oct 2009
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Posted: 16 Oct 2009 at 09:56 \| IP Logged

The way that I understand it is this (and please help clarify).....

1-19%/no significant influence- use Cost Method

20-50%/ significant influence- USe Equity Method- NO consolidation

51-100%/ significant influence- use Purchase Method and Consolidate(external reporting ONLY)

I believe that we are under the assumption that a company that owns more than 50% will have significant influence.

so if we are in the 51-100% ownership range and we are internally reporting, are we still using the equity method? Or do we use the Purchase Method for internal reporting as well?

Just a question that arose in my mind from the discussions above. Thanks.

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BJordan85
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Posted: 17 Oct 2009 at 02:21 \| IP Logged

Purchase Method is outdated. It is now the Aquisition Method for ownership greater then 50%.

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lovethepirk
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Joined: 10 Jul 2009
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Posted: 17 Oct 2009 at 10:21 \| IP Logged

Could someone explain what this is:
"CAR IN BIG"

i only am using wiley book

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