dividend treatment under consolidation and prop consolidaiton

CFA Level II
#1

I believe they’re ignored on I/S just like under equity method. What about balance sheet? Ignored too?

#2

I do not believe you reflect a dividend payment in either consolidation methods. You have consolidated the statements, so the dividend is an outflow from the earnings on your statements now. That’s just my thought. Anyone?

#3

i dont think dividends are on I/S for equity, consolidation and prop consolidation…

#4

yseric Wrote: ------------------------------------------------------- > i dont think dividends are on I/S for equity, > consolidation and prop consolidation… Right. They’re ignored on all three. For equity method, they are subtracted from the equity line item. What is the deal on consolidation/prop consolidation?

#5

I asked this exact same question earlier today - you should search. For consolidation and prop. consolidating, the dividends are essentially considered intracompany transactions, so they do not figure in to your calculations at any point.

#6

dividends received reduces the investment line item on the balance sheet under the equity method: Equity Investment Beginning + Share of NI - Share of dividends - Amortization of excess of fair value of PPE = Equity Investment End Ignored on income statement for all