As we all know, many businesses aim to achieve higher profits, increase their market share, expand internationally, diversify business risk, and reduce costs by acquiring a portion of another business's capital.

Those businesses/investors should use the equity method of accounting to measure their share in the investee's capital and operations when their ownership interest grants them a significant influence over the investee's operating and financial policies.

This course discusses the equity method and explains how to distinguish the Equity-method investees from other investments.

This course illustrates the accounting treatment for equity method investees step-by-step, including recognition criteria, subsequent measurement, the proper accounting treatment for the resulting gain/(loss), and dividends.

This course uses practical cases and examples that simplify the theory behind US GAAP standard ASC Topic 323 "Investments – Equity Method and Joint Ventures" and IFRS standard IAS 28 "Investments in Associates and Joint Ventures," highlighting the main differences between them.

Course Key Concepts: Equity Method, Equity-method Investees, Associates, Affiliates, Joint Ventures, ASC 323, IAS 28, Significant Influence, Investments.

Learning Objectives
  • Explore the main differences between Equity-method investees and other types of investments.
  • Discover the proper accounting treatment for equity method investments.
  • Identify how to measure the acquired share of equity-method investee's equity.
  • Recognize the differences between US GAAP and IFRS in applying the equity method of accounting.
Last updated/reviewed: August 15, 2023
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5 Reviews (25 ratings)

Reviews

4
Member's Profile
Good informative course providing valuable information and insights. I like the practice questions and the scenarios; they were helpful in illustrating the learning points.

4
Anonymous Author
good overview of when to apply the equity method and how to complete the transactions

4
Anonymous Author
it's a short course but goes in deep detail and discusses the material further

3
Member's Profile
The content was good. The teacher could use some enthusiasm

5
Member's Profile
Moataz course on Equity Method Accounting was well prepared

Prerequisites
Course Complexity: Foundational

No advanced preparation or prerequisites are required for this course.

Education Provider Information
Company: Illumeo, Inc., 75 East Santa Clara St., Suite 1215, San Jose, CA 95113
Contact: For more information regarding this course, including complaint and cancellation policies, please contact our offices at (408) 400- 3993 or send an e-mail to .
Instructor for this course
Course Syllabus
INTRODUCTION AND OVERVIEW
  Introduction to Accounting for Equity Method Investments2:48
  Significant Influence8:33
  Assessment of Significant Influence6:56
  Acquisition of an Equity Method Investee9:55
  Measurement After Initial Recognition-Part 16:31
  Case Study 17:31
  Measurement After Initial Recognition-Part 21:55
  Case Study 27:49
  Intra-entity Transactions3:22
  Impairment4:58
  Changes in Ownership Level5:27
CONTINUOUS PLAY
  Accounting for Equity Method Investments1:05:43
SUPPORTING MATERIAL
  Slides: Accounting for Equity Method InvestmentsPDF
  Accounting for Equity Method Investments Glossary/ IndexPDF
REVIEW AND TEST
  REVIEW QUESTIONSquiz
 FINAL EXAMexam