Can someone explain y NI is the same under equity and consolidation?

Under the equity method we show our percentage of the sub’s net income.

Under consolidation we show 100% of the sub’s revenue and expenses (so 100% of the sub’s net income), then subtract the percentage of net income that isn’t ours; 100% minus their percentage is our percentage.

Everything else is the same, so the net income’s the same.


Under the equity method, we add equity income (% of sub’s income - dep charges) to our income

and present the investment in 1 line on balance sheet (begining + equity income - % of dividends paid)

Under consolidation we pick up 100% of sub’s revenue and expenses (so operating income is higher?)

and subtract the % of net income that isnt ours? what is the accounting entry for this subtraction on income statement?

and what is the effect on equity under equity method, propotionate consolidation, and consolidation?

Thanks in advance!



It’s a debit to Minority Interest in Sub’s Income or something catchy like that.

Same, same, and same.

You’re welcome in arrears.