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13 Cards in this Set
- Front
- Back
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fair value (cost) method |
If the stock is not marketable, a common stock investment investment is accounted for at its original cost. If the stock is marketable, the investment is carried at fair value with an associated adjunct/contra equity account for the change in value from original cost (assuming and available-for-sale security). In both cases, dividends received are recorded as income from the investment |
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equity method |
accounting for a common stock investment on an accrual basis; earnings increase the investment and dividends decrease it |
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one-line consolidation |
another name for the equity method of accounting; under the equity method the investor's income and the controlling interest share of consolidated net income are equal. |
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parent-subsidiary relationship |
a relationship that gives one corporation the power to control another corporation through its majority common stock ownership |
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affiliate |
a subsidiary in a technical sense, although the term is sometimes used to refer to 20% to 50% owned equity investees. |
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noncontrolling interest |
the stockholder interest in a subsidiary not owned by the parent company |
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push-down accounting |
establishment of a new basis of subsidiary accounting based on the price paid by the parent company |
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controlling share of net income |
share of consolidated net income available to the controlling interest shareholder |
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retained earnings (ending) |
total retained earnings at the end of the year |
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total assets |
The total of all assets for the consolidated reporting entity |
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total equities |
The total of all liabilities and shareholders' equity accounts for the consolidated reporting entity |
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downstream sale |
sales or other intercompany transactions from parent company to subsidiary. |
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upstream sale |
sales or other intercompany transactions from subsidiary to parent company |
