Is the consolidation method also known as the acquisition method & likewise, is the accounting method also known as the equity method?
Consolidation is often loosely used in lieu of the acquisition method but consolidation also is the correct term while including the results of investment in associates (ie. the equity method). Equity method is not the same as the acquisition method though.
So is that “yes” or “no” to my two questions?
Yes and no, respectively. There is no method known as the accounting method.
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Got it. There are just three methods: Equity, Acquisition, and lastly Proportionate Consolidation.
Yup.
(What you’re calling Acquisition is technically known as Full Consolidation. Both Full Consolidation and Partial Consolidation are acquisition methods.)
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Is the Equity method also known as the Financial Assets method ?
No.
You use the equity method when you have influence but not control. You use the financial assets method when you don’t have influence.
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Is the following investment reported in Other Comprehensive Income?
Less than 20% ownership, Equity, Available for Sale.
Unrealized gains and losses from available-for-sale securities go through OCI.
Realized gains and losses go through the income statement.
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The P&L statement excludes Other Comprehensive Income, right?
Yes.
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Fair Value through the P&L is only associated with securities designated “Held-for-Trading”, and Fair Value through OCI is only associated with securities designated “Available-for-Sale”, right?
Yes, as long as you’re talking about unrealized gains and losses.
Realized gains and losses go through P&L for all securities.
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