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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: June 20, 2021

1 Review (4 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.

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 .
Course Syllabus
INTRODUCTION AND OVERVIEW
  2:48Introduction to Accounting for Equity Method Investments
  8:33Significant Influence
  6:56Assessment of Significant Influence
  9:55Acquisition of an Equity Method Investee
  6:31Measurement After Initial Recognition-Part 1
  7:31Case Study 1
  1:55Measurement After Initial Recognition-Part 2
  7:49Case Study 2
  3:22Intra-entity Transactions
  4:58Impairment
  5:27Changes in Ownership Level
CONTINUOUS PLAY
  1:05:43Accounting for Equity Method Investments
SUPPORTING MATERIAL
  PDFSlides: Accounting for Equity Method Investments
  PDFAccounting for Equity Method Investments Glossary/ Index
REVIEW AND TEST
  quizREVIEW QUESTIONS
 examFINAL EXAM