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notes/10 - Projects/CSC/Chapter 11/Equity method etc..md
Yeghia 248656cf1d sync 2026-03-30
2026-03-30 03:23:09 -04:00

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The rule to remember:

  • Less than 20% ownership → cost method (only record when cash is received as dividends)
  • 20% to 50% ownership → equity method (record your share of profit/loss regardless of cash)
  • Over 50% ownership → full consolidation

Also important: this $15,000 is a non-cash item — Trans-Canada reports it as income but hasn't actually received the cash. So when calculating cash-based ratios, you'd subtract it out.