Accounting for Equity Method Investments

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.