FRA: Equity Vs. Acquisition Method

CFA Level II FRA
#1

Hello,
I have a doubt about the effect on Shareholder´s Equity on these both methods.
In the Equity method, does shareholder´s equity is affected by the proportion of Net Income of the Investee?
i ask because i have seen some people say that it does not get affected.
And in the Acquisition Method, does Shareholder´s equity get affected?

thanks in advance! i am not an accountant :frowning:

#2

EQ Method: Recognize portion of investee’s NI, which flows to RE, which flows to equity on the BS.

Acquisition method: combine A & L’s, portion of NCI goes to the BS