Proportionate consolidation would require the proportionate amount of equity of the subsidiary to be reported in BS. Shouldn’t the ROE be lower in Proportionate consolidation then?
nvm.
Net income is always the same under any of equity, full consolidation and proportionate consolidation.
Prop Consolidation does not add anything to equity, just the % of assets, liabs, rev, expenses
Unless you issue stock to fund the purchase 
For information, in case of goodwill and funding by cash, the equity with consolidation proportion method is less than with equity method.
Can you explain this? I dont think i agree…
If you have goodwill under equity method then it just goes into your investment (balanced by decrease in cash paid)
If you have goodwill under prop consol method then it goes into goodwill (balanced by decrease in cash paid)
It is correct in case of no goodwill to say: proportion consolidation doesnt add target equity to the equity of acquirer. But it is correct just by chance (goodwill =0)
the right method is to add propotionnally all to assets, liabs, equity. But we must remember to subtract the price of acquisition in equity (same as in assets).
so, the right method is: (suppose p is the proportion og acquisition)
assets: subtract price, plus p times target’s assets
liabilities: plus p times target’s liabilities
equity: subtract price, plus p times target’s equity
in case of no goodwill, price = p times equity. So, you feel we must not change equity. But it is not correct.