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This document outlines the accounting entries required under the equity method and cost method for investments in subsidiaries. For the equity method in the first year after acquisition, entries include acquiring the subsidiary, dividends from the subsidiary, sharing in the subsidiary's net income, and eliminating entries. In subsequent years, entries include dividends, sharing in net income, amortizing excess assets/liabilities, and realizing or deferring profits from downstream and upstream sales. The cost method follows a similar process without sharing in net income and with amortizing goodwill instead of excess assets/liabilities.
This document outlines the accounting entries required under the equity method and cost method for investments in subsidiaries. For the equity method in the first year after acquisition, entries include acquiring the subsidiary, dividends from the subsidiary, sharing in the subsidiary's net income, and eliminating entries. In subsequent years, entries include dividends, sharing in net income, amortizing excess assets/liabilities, and realizing or deferring profits from downstream and upstream sales. The cost method follows a similar process without sharing in net income and with amortizing goodwill instead of excess assets/liabilities.
This document outlines the accounting entries required under the equity method and cost method for investments in subsidiaries. For the equity method in the first year after acquisition, entries include acquiring the subsidiary, dividends from the subsidiary, sharing in the subsidiary's net income, and eliminating entries. In subsequent years, entries include dividends, sharing in net income, amortizing excess assets/liabilities, and realizing or deferring profits from downstream and upstream sales. The cost method follows a similar process without sharing in net income and with amortizing goodwill instead of excess assets/liabilities.