It was my understanding (based on Schweser readings) that the shoareholder’s equity is independent of the consolidation method used for reporting purposes. In this question, a firm is increasing its share from 19% to 50% using cash. The question asks to pick “level of influence” that will produce highest shareholder’s equity (answer is “deemed to have control”) I don’t get it. Please help.
Please see Schwesers errata, acquisition (consolidation) reports greater SE than equity (none) and proportionate consolidation (given there is a greater minority interest associated with it), hope this helps
Im pretty tired and sleepy but i am sure equity is the same under all methods.
Consolidation (Acquisition Accounting, or formerly “Purchase” Accounting) is highest equity because as Northeastern said, non-controlling interest (the portion of equity that has been consolidated but the consolidating company does not own) is included in Equity.