Week 9 Flashcards
1
Q
What are associated companies?
A
A company without a controlling interest but still has significant influence
2
Q
What percentage of shares would a firm own to have significant influence?
A
15 - 50%
3
Q
What method should we use to record a significant influence?
A
Equity Method
4
Q
What does the equity method involve?
A
It accounts for share equity attributable to an investment in shares in another company
5
Q
When is investment revalued?
A
Every balance day
6
Q
How do we calculate share of earning?
A
% of earnings attributable to firm
Less Armotized Revaluations
Less Armotoised Goodwill
**Do not include dividends
7
Q
How do we calculate what is the amount showing in the balance sheet?
A
1) Investment
2) Add Share of earnings
3) Dividend Adjustment
4) Any other adjustments
