equity method

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An accounting method that companies use to represent their ownership in companies in which they have significant influence This is usually true when the percentage of ownership is between 20% and 50% In addition, this method is often used in parent-only statements to account for the investment in a subsidiary In the latter case, the account will be eliminated on the consolidating working papers at the end of the year when consolidated financial statements are prepared
Method of accounting for investments in marketable equity securities; is required when the investor owns 20 percent to 50 percent of the investee company The amount of investments carried under the equity method represents a measure of the book value of the investee rather than the cost or market value of the investment security (See p 385)
an accounting method used for long-term investments when the investor has significant influence over the investee (p 695)
Valuation method for holdings in companies whose business policy can be significantly influenced (associated companies) and where the pro rata share of the company's net income/loss for the year is reflected in the book value of the holding For distributions the value is reduced by the pro rata amount
equity method

    Hyphenation

    Eq·ui·ty Meth·od

    Turkish pronunciation

    ekwıti methıd

    Pronunciation

    /ˈekwətē ˈmeᴛʜəd/ /ˈɛkwətiː ˈmɛθəd/
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