Equity Income

Looking at the upstream downstream sales BB in CFA curriculum.

Can I just confirm that when a question asked for equity income calculations we do not factor in the % ownership of dividends? All dividend related information has been omitted in the answer. Any clarification please.

Dividends received on an equity investment are not income; they’re considered a return _ of _ capital, not a return on capital.

That’s the reason that you subtract them from the Investment in Affiliate account on the balance sheet.

Thanks Bill

You’re welcome.