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Under which method does the statement of comprehensive income show "Equity in earnings of Subsidiary"?
A) Cost method
B) Equity method
C) Modified equity
D) Consolidation
Equity Method
A method of accounting where an investor records its investment in an associate company at original cost and subsequently adjusts the carrying amount for its share of the profit or loss and other comprehensive income of the associate.
Consolidation
The process of merging the financial statements of two or more entities into one, typically within a group comprising a parent company and its subsidiaries.
- Understand the key principles and applications of the equity method of accounting.
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Learning Objectives
- Understand the key principles and applications of the equity method of accounting.
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