Just wanted to confirm: Schweser Notes indicated Consolidation Method; Proprotional and Equity Method will have same Net Income and same Share Holders Equity. BUT CFA Cirriculum indicates that under Consolidation Method, Minority interest is added to Share Holders Equity which increases SHE, does that also mean it decreases ROE? (the old way, I believe is to have a line for minority between Liabilities and SHE). I get confused when there’s inconsistencies like this. Can someone kindly confirm? Thanks.
schweser royally f’d up their consolidation chapter - look at the errata, all their examples are basically toast. THe problem is US GAAP rules changed in Q1 2009, and it seems they didnt bother updating their notes to reflect that. Honestly is unacceptable when you consider how much they charge for their product…
I just went through a question last night about mergers and cash vs. stock purchase which directly contradicted what is in the 3 day exam review book that I distrinctly remember reviewing.
Is it general practice (in real world) to take out MI when calculating ROE?
i have this confuse as well