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spaztikenigma
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Joined: 08 Aug 2008
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Posted: 05 Apr 2009 at 00:47 \| IP Logged

When a company accounts for their investment in another company using the equity method, are they still receiving dividends, even though they arent reporting them? Are they realizing them even though they arent recognizing them?

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accountingabc
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Joined: 20 Sep 2008
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Posted: 05 Apr 2009 at 01:02 \| IP Logged

When a company uses the equity method and receives dividends, the JE is

DR- Cash

CR- Investment in X

So the company recognizes the cash from dividends but then decreases its investment in the company but crediting it. Hope I explained what you asked.

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