equity accounting

equity accounting
The practice of showing in a company's accounts a share of the undistributed profits and a share of the net assets of another company in which it holds a share of the equity (usually a share of between 20% and 50%). The share of profit shown by the equity-holding company is usually equal to its share of the equity in the other company. Although none of the profit may actually be paid over, the company has a right to this share of the undistributed profit. cost classification work in progress degrees of equivalent(units) completion (%) unitsdirect materials 3000 100 3000direct labour 3000 150 1500overheads 3000 150 1500Equivalent units. A simple example.

Big dictionary of business and management. 2014.

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  • equity accounting — ➔ accounting * * * equity accounting UK US noun [U] (also equity method [S]) ACCOUNTING ► a method of accounting that takes into account a percentage of profits from shares that a company owns in another company: »The group s equity accounting,… …   Financial and business terms

  • equity accounting — See equity method of accounting. Practical Law Dictionary. Glossary of UK, US and international legal terms. www.practicallaw.com. 2010 …   Law dictionary

  • Equity Accounting — A method of accounting whereby a corporation will document a portion of the undistributed profits for an affiliated company in which they own a position. The amount of undistributed profits that the corporation decides to document is generally… …   Investment dictionary

  • equity accounting — The practice of showing in a company s accounts a share of the undistributed profits and a share of the net assets of another company in which it holds a share of the equity. See: equity method, gross equity method …   Accounting dictionary

  • equity accounting — / ekwɪti əˌkaυntɪŋ/ noun a method of accounting which puts part of the profits of a subsidiary into the parent company’s books …   Dictionary of banking and finance

  • accounting — ac‧coun‧ting [əˈkaʊntɪŋ] noun [uncountable] 1. ACCOUNTING JOBS the usual word for the profession of accountancy in the US 2. ACCOUNTING the work of keeping a company s financial records, recording its income and expenses, and its business deals:… …   Financial and business terms

  • equity method — An accounting method used to reflect an investor s interest in a company. This method is used when the investor owns 20 percent or more of the investee and has significant influence over the investee. Under the equity method, the investment is… …   Financial and business terms

  • accounting — ac·count·ing n 1: an often court ordered presentment or examination of accounts a complete accounting would be necessary to determine the nature of the expenditures Case & Comment 2: the settlement by judicial action of the assets of a… …   Law dictionary

  • Equity method — in accounting is the process of treating equity investments, usually 20–50%, in associate companies. The investor keeps such equities as an asset. Proportional share of associate company s net income increases the investment, and proportional… …   Wikipedia

  • Equity Funding — Corporation of America was a Los Angeles based U.S. financial conglomerate that marketed a package of mutual funds and life insurance to private individuals in the 1960s and 70s. It collapsed in scandal in 1973 after ex employee Ronald Secrist… …   Wikipedia

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