Equity Income vs Investment Income

Can someone please confirm that equity income from investments reported on the income statement includes only investments, where the parent has either significant influence or joint ventures? Investment income includes only dividends from available-for-sale and trading securities?

Equity income from affiliate is for those accounted for under the equity method only.

Ok, equity income equity method only What about investment income?

how about dividends? you recognize dividends on the I/s regardless of the classification? This is a self confirmation question

Equity income is booked via the equity method. It is the parent’s pro-rata portion of the child’s net income. Assume A owns 30% of B. B has net income of 100. A recognizes 30 for equity income. Investment income would be dividends, interest payments, and realized/unrealized losses. However, note that only Held for Trading would recognize the unrealized gains/losses.


under the equity method div’s received are a return of invested capital. Div’s don’t hit net income for investments under the equity method.