INFORMATIONAL SCOPES AND THE AREA OF APPLICATION OF THE EQUITY METHOD

Vojislav Sekerez

DOI Number
https://doi.org/10.22190/FUEO191021013S
First page
173
Last page
186

Abstract


The equity investments in other entities may result in different level of control over their activities and different consequential relationships between the investors and investees. For the purposes of valuation of the investments in associates and joint ventures, which are followed by significant influence or joint control of the investor, it is necessary to use the equity method. Its application is connected with the number of specific issues that result in a completely different accounting treatment of some business transactions in relation to the acquisition method and consolidation of subsidiaries. The aim of this paper is to analyze the key features and area of application of the equity method, which will be accompanied by the reference to some of its most obvious advantages and disadvantages

Keywords

significant influence, joint control, equity method, consolidated financial statements, separate financial statement

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References


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DOI: https://doi.org/10.22190/FUEO191021013S

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