Intercorporate Investments
Free CFA Level II lesson in Financial Statement Analysis. 13 min read, ~1,925 words.
<20% passive: fair value on balance sheet, dividends as income, no share of earnings. 20-50% significant influence: equity method. Carrying value = Cost + Share of NI - Amortization of excess - Dividends. 50% control: acquisition method. Line-by-line consolidation, goodwill on balance sheet. Downstream = parent bears full elimination. Upstream...
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What this lesson covers
- Content
- Example 1
- Example 2
- Common Mistakes
- Key Takeaways
- Exam Shortcuts
Learning objectives
- intercorporate investments
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