logo share us

Equity Method

   

Definition: the Equity Method is a tool of accounting used by companies to record their equity investments in a separate company or entity which becomes their associate company or joint venture company. With the help of the equity method, the investor company (holding or parent company) values its investment and its share in the profits and losses of the investee company.
According to both accounting standards (US GAAP and IFRS), a holding company should use the equity method when it has less than majority shares in the subsidiary company but it does have a significant influence over the operational activities of the subsidiary company.


   
   
💡

Learn more about the Equity Method.



More on accounting and auditing: Accounting Cycle, Accounts Payable, Accounts Receivable, Accrued Revenue, Amortization, more on accounting and auditing...


MBA Brief provides concise yet precise definitions of organizational concepts, management methods, and business models as taught in an MBA program.

We keep it short and provide links to high-quality websites where you can learn more about your topic.


add us to your desktop

Add MBA Brief to your desktop / iPad

   

© 2024 MBA Brief - Last updated: 6-12-2024  -  Privacy   |   Terms