I know its a rather basic question, but I’m getting tripped up on this. When talking about intercorporate investments What is the difference between EQUITY INCOME reported on the parents income statement and INVESTMENT INCOME? Thanks in advance for any responses.
Investment Income (as reported on Income Statement) includes dividends. Normally for investments in financial assets. Equity Income (as reported on Income Statement) does not include dividends. Dividends decrease the investment account and increase cash. Used for equity investments
that helps, thanks
Equity income only includes those investments where parent has: 1. influence or 2. in case of joint control