Income statement: Purely equity income * % owernship. This is similar to “interest” income, meaning it does not impact operating income but hits net income
Balance sheet: Carrying value + (NI - dividends)*% ownershit = asset value
No liabilities, straight pump to equity via the income statement
Consolidation:
Income Statement: Record 100% of the units income statement as if it were the parent’s own. Only difference is minority interest credit is used in the income statement below operating income.
Balancesheet: Carry at 100% ownership as an asset, carry 100% ownership of liabilities, offset ownership % in equity to balance. This will be a positive number but is actually a reduction to equity. Said differently, equity holders do not have the rights to the assets of the % ownership in the consolidated entitiy, hence the seperate entry in equity.